PRESENTATION ON TARIFF POLICY By S.R.SETHI DIRECTOR (OPRS) DELHI TRANSCO LTD

WELCOME

IMPACT OF ELECTRICITY ACT, 2003 ON POWER SECTOR IN DELHI. POWER SECTOR IN DELHI WAS RESTRUCTURED ON IN THE UNBUNDLED SCENARIO THE SET UP OF POWER SECTOR IS AS FOLLOWS:- -TRANSMISSION COMPANY -THREE DISTRIBUTION COMPANIES -GENERATION COMPANY -HOLDING COMPANY

TARIFF DELHI HAS GONE IN FOR SINGLE BUYER MODEL FOR POWER PURCHASE FOR FIVE YEARS UPTO THE YEAR 2007 TO KEEP RETAIL/CONSUMER TARIFF COMMON ALL OVER DELHI, THE BULK SUPPLY TARIFF TO THE VARIOUS DISCOMS IS BASED UPON THE AT&C LOSSES AND REDUCTION THEREOF DURING THE PERIOD OF 5 YEARS.

A SUBSIDY OF Rs.3450 CR. HAS BEEN ENVISAGED FOR 5 YEARS AS FOLLOWS. (CR)

AT&C LOSS REDUCTION DURING THE 5 YEARS FOR DIFFERENT DISTRIBUTION LICENSEES IS AS FOLLOWS:- % CE- DISCOM SW-DISCOM NNW-DISCOM

TRADING AS PER THE NEW ACT, (SECTION 39) TRADING FUNCTIONS HAVE TO BE SEPARATE FROM THE TRANSMISSION FUNCTIONS. SEPARATE TRADING COMPANY IS REQUIRED TO BE SET-UP. DELHI IS COMPELLED TO CREATE A SEPARATE GOVT. OWNED TRADING COMPANY MERELY FOR THREE YEARS OF TRANSITIONAL PERIOD TO DISCHARGE RESPONSIBILITY ENTRUSTED TO TRANSCO UNDER THE TRANSFER SCHEME. AS PER CERC'S CONCEPT PAPER ON ELIGIBILITY CONDITION FOR GRANT OF POWER TRADING LICENCEES, IT PROPOSES TO IMPOSE A CAPITAL ADEQUACY REQUIREMENT ON NEW TRADING COMPANY WHICH REQUIRE GNCTD TO FIND CAPITAL TO THE EXTENT OF RS CR.

CONTD….. WHETHER THE LICENCEES IN DELHI WOULD MANAGE THE POWER PROCUREMENT AFTER THE YEAR 2007 SPECIALLY WHEN DELHI HAS SHARE IN ALL THE CENTRAL SECTOR PROJECTS IN THE NORTHERN REGION  THIS HAS A SPECIAL REFERENCE TO NDMC AND MES HAVING A LOAD DEMAND OF 250 MW AND ABOUT 50 MW RESPECTIVELY. EVEN FOR THE OTHER DISCOMS ASSIGNING OF PPAS AND THE ACCOUNTING THEREOF IS GOING TO POSE A PROBLEM AND WOULD NECESSITATE THEM TO HAVE SEPARATE CELLS FOR POWER PROCUREMENT AND OTHER RELATED ISSUES INCLUDING INFRASTRUCTURE – ADDITIONAL COST WOULD BE PASSED THROUGH TO THE CONSUMERS.

CONTD… AS PER THE TRANSFER SCHEME OF POWER SECTOR RESTRUCTURING, GOVT. IS GIVING A LOAN TO DELHI TRANSCO WITH A MORATORIUM OF FOUR YEARS TO BE REPAID OVER A PERIOD OF 12 YEARS. IF TRANSCO REMAINS THE ENTITY TO ARRANGE POWER, LOAN AMOUNT WAS PLANNED TO BE RECOVERED THROUGH WHEELING CHARGES, THE IMPACT WOULD HAVE BEEN QUITE NOMINAL OVER A SUCH LARGE PERIOD. IF THE TRADING COMPANY IS FORMED IN DELHI HOW WILL IT RECOVER THE COST OF DEBT SERVICING I.E. LOAN GIVEN BY THE GOVT. TO SUBSIDIZE THE BULK SUPPLY TARIFF TO THE DISCOMS..