Transparency in power tariff

Central Information Commission has stated an Electricity Regulatory Commission (ERC) has to make complete information public before seeking any objections from people on tariff proposals. This measure is required to protect the interests of consumers, as that would decide the power tariff. The Electricity Act 2003 mandates transparency regarding tariff fixation and other significant issues. The Delhi ERC has been directed to follow national electricity and tariff policy besides electricity plan. It is not legally correct to say that DERC would share information only after a decision is taken as it has a mandate to inform the people while formulating the tariff

The role of an Electricity Regulatory Commission is crucial in informing people about the tariff plans of Power Distribution Companies (Discoms), and they should invite the objections of people before deciding power charges. Section 4(1)(C) of RTI Act imposes such an obligation. Social activist Anil Sood sought to know information about distribution transformer-wise negative losses in respect of Discoms in Delhi for the year 2011-12 from Delhi Electricity Regulatory Commission (DERC).

The PIO of DERC replied that it would analyse DT-wise negative losses and their impact and will be submitted for further directions of the Commission, but it was not done. Anil filed another RTI request regarding capitalisation of fixed assets and how the DERC would deal with capitalisation of fixed assets leading to revenue gap of around Rs 20,000 crore. As he explained the urgency, I admitted his application out of turn as the last date of filing objections by the consumers was being closed by DERC on that day itself.

The complainant contended before the Commission that if the DERC applies the tariff fixation without disclosing the complete information and hearing the objections, it would cause irreparable loss to the consumers in the capital city of Delhi and will result in undue benefits to the Discoms. When the Commission questioned the complainant, why he has not filed this complaint earlier, he explained that he did not receive any response to the complaints made to the Chief Secretary, the Principal Secretary (Power), GNCTD on 6-4-2015.

I issued an ex-parte interim order on April 17, 2015, to extend the date of receiving objections from the consumers to a convenient date after disclosing the information under Section 4(1)[c] of the RTI Act as requested by the complainant. The DERC challenged this order before the Delhi High Court. Stay was not granted, but the Court directed the DERC to defer hearing and appear before the CIC on May 6. The High Court directed the CIC to conclude hearing by May 8. On May 6, the complainant submitted that the Executive Summary placed by the DERC does not have the prudence check of capital assets of some discoms.

He claimed that prudence check was not done for the past four years. He pointed out contradictions and anomalies in the DERC disclosure and that the huge revenue gap amounting to Rs 19,505 crore was not explained. Anil Sharma, Charted Accountant, presented that the BSES discoms diluted their investments reducing it to 21 per cent and their balance sheets were not signed by the members of Delhi Government, though their names were typed. He also submitted that these two companies took huge loans from banks mortgaging assets without the permission of DERC. Reduction in fuel charges was not reflected anywhere in the summary given by the DERC.

The complainant questioned how carrying cost was being allowed by way of surcharge in the absence of physical verification of assets. He also stated that the DERC did not address the issue of negative loss records which could cause huge loss to consumers and give gains to Discoms, which is in violation of the Electricity Act, 2003, National Tariff Policy 2005 and National Electricity Policy 2005. The DERC is yet to instruct Discoms to install separate neutral summary as provided under the BIS. Rather, the responsibility has been shifted on the consumers. The complainant inferred that the GNCT of Delhi and DERC are just sitting with folded hands and have left everything to the consultants and Discoms.

Jayasree Raghuman, Secretary, DERC, stated that the order of the CIC was complied with and assured to provide para-wise remarks to the complainant. Entire petitions of Discoms along with balance sheets were placed on the official website and the summary is just ‘information’ and not admission of Discoms' statements. She also made it clear that nothing was written off and DERC did not permit creation of any charge in the government assets. She claimed that decision was yet to be taken by the DERC and they had not suppressed any information.

She also explained that pendency of physical verification of assets would not cause any harm to consumer interests, as the DERC reserves its power to impose penalty of withdrawing 15 per cent of the value. Jayasree claimed that they could not be asked to create information under the RTI. It is a very important issue as the DERC has to make complete information public before seeking any objections from people. This measure is required to protect the interests of consumers, as that would decide the power tariff. The Electricity Act 2003 mandates transparency regarding tariff fixation and other significant issues.

The DERC has to follow national electricity and tariff policy besides electricity plan. I directed the DERC to furnish the copy of information published under S. 59(2) to this Information Commission and the complainant. The DERC has to disclose certain details under S4 (1) (c) of the RTI Act. I directed it to inform about: a) Prudence Check of R & M and A& G has not been carried out from the year 2004-05 onwards till date, b) non-submission of report by consultant PWC highlighting the major anomalies by it during the course of Prudence Check, During the Prudence Check sessions the consultant intimated that it did not have the information in documentary form; d) Prudence Check/making presentation to the DERC was not in the list of deliverables; e) They have not kept the record of Prudence Check observations, f) The DERC has not disclosed the cost of litigation incurred by the Discoms on contesting the issue of Audit of Discoms and challenging the orders of the CIC holding Discoms as public authority; g) There is a demand of Income Tax amounting to Rs 327 crore for the year 2009-2010; h) The Income of Rs1200 crore that would definitely impact the order of tariff fixation; etc.

The DERC must disclose information related to tariff fixation in "simple language" before inviting the public views on the matter. It is not legally correct to say that DERC would share information only after a decision is taken as it has a mandate to inform the people while formulating the tariff because it is seeking their objections and views, which cannot be given without complete information.