P D Sudhakar, Chairman, Delhi Electricity Regulatory Commission (DERC)

It is not my place to comment on the matter of the last year's tariff. The issue is in the High Court with a decision pending on it. However, for the year 2011-12, we have already initiated the tariff setting procedure for the Delhi discoms. The petitions by the discoms have already been received and these have been put on the public domain for the purpose of inviting comments from the public. Once the comments are received, we will hold a public hearing and then announce a new tariff. This is the present status of the tariff process for the year 2011-12.

The procedure for announcing a new tariff is a long drawn one with several steps. It is initiated when the discoms file in their petitions with the Regulatory Commission along with their financial details like accounts, expenditure, losses and interests. The petition also includes the discoms' suggestions and demands for the tariff requirement. This is an annual process.

The next step involves putting the petitions on public domain for consultation and debate.. In addition to that, a public meeting is also held to seek comments from the public. After taking all this into consideration, we conclude as to what the new tariff should be. In between, there are a few things, which do not fall under the DERC's control like the cost of the power purchased by the discom. Things like these, we have to factor in before deciding the final tariff. All these steps are taken before the final tariff order is passed.

We have our in-house experts to take care of the auditing and as and when required, we also take services of others on this. We have separate divisions with people working from various sectors, whose expertise is needed for this particular analysis. Everything is looked into and duly examined.

Auditing is not followed as a separate process in DERC. However, all the companies operating in the power sector function under the Companies Act and prepare their accounts according to the rules and regulations therein. Auditing is prescribed under the Companies Act and therefore, I am sure the discoms take care of it themselves.

There are a few initiatives which the commission is exploring on a large scale. At present, there are three programmes, which are being explored - Consumer Awareness Mission, Consumer Grievance Redressal and Energy Conservation and Energy Efficiency.

There was an urgent need of a programme like Consumer Awareness Mission, since it is hard for a layman to understand the complexities of the tariff setting procedures. This lack of knowledge, generally, makes the consumer feel cheated. Further, the processes that come out are not transparent. In order to address this, we have started a media campaign to make the consumer understand the process and thus, make him more aware. The media campaign includes printing of bulletins in the national newspapers highlighting the several components of the tariff. It is very important for a common man to understand the procedure of tariff formulation as their participation would result in the improvement of the system.

Under the same programme, we published another bulletin on AT&C losses and how these losses have been brought down in Delhi by the discoms. Since the process involved here have a very complicated terminology which the consumer finds very hard to understand, we issue such bulletins to make the consumer understand the system in a less complicated language. In order to push Consumer Grievance Redressal System, we published another bulletin providing details of the system listing its contact numbers, how can it be approached, the problems which can be resolved there. There are consumers who do not know who to approach in case of a billing problem or metering issues or if they need a new connection. Many of them approach the Commission for such issues not knowing that we are not the appropriate forum for it.

Apart from these awareness creation measures, we also propose to hold interactive sessions with Resident Welfare Associations (RWAs) in different areas of the city. We plan to invite the concerned stakeholders like discoms, MCD, NDMC, transmission officials, other experts, etc., as well to these sessions. These interactive sessions will take care of the consumers' queries and doubts.

We are still in the planning stages. Since such initiatives have never taken place, it requires a lot of planning and organising. But we have plans to roll it out soon and start with a few areas and then gradually, cover the entire city. Also, we want to further strengthen the Consumer Grievance Redressal system. We recently held a meeting with all the chairmen of the all four consumer forums and had a discussion on the measures that can be taken to make the system more effective and independent.

To start with, the AT&C losses were quite high in Delhi. However, after privatisation, the discoms have worked consistently to bring down these losses. These discoms have defined targets every year for the reduction in the AT&C losses for the past nine years. This loss reduction programme works on incentive basis, which means the more they reduce the more benefits these discoms derive out of the scheme. These discoms, thus, have been working according to the targets assigned to them. Initially, the targets assigned to them were to reduce the losses to 50 percent. From there, it has come down to 17 to 20 percent. This speaks volumes of the work done by the discoms.

Every year new targets are fixed and the discoms have been consistently meeting these targets. As for comparisons with AP discoms, I cannot comment on that as I am not aware of their incentives or where do they stand. As for Delhi discoms, they have taken the loss percentage well below the targets this year.

The profit made by the discoms by selling surplus power in the short-term market is actually indirectly shared by them with the consumers. People have a misconception that the revenues earned by the discoms are pocketed by them.

In these private discoms, 49 percent is government's holding; so whatever profit is earned by these discoms, 49 percent of that goes to the Government of Delhi. This is like money paid to the government. The rest of the profit is taken into account for the tariff calculations for the next year under other sources of revenue. Therefore, if the company gets additional funds, the benefit does get passed on to the consumers next year, albeit indirectly. Thus, the revenue earned by the discoms out of selling the surplus power gets invested back into the company.

In case, the financial position of these discoms require them to borrow from the bank, they will have to bear the interest, which would be cost to the company while working out the financial position of the discom for the purpose of deciding the tariff. All such interests and loans are added to the revenue requirement of the discom. If through means like selling surplus power, the discoms borrow less, it only works in favour of the consumers while deciding the tariff. Thus, ultimately any revenue or cost is adjusted later and therefore, people who are aware of the mechanism do not complain.

Another factor is that electricity cannot be stored, so if there is no demand, the utilities will have to sell the surplus power. However, it is not ensured that this unscheduled trading will always get the utilities a higher price. These are some of the things which are part of the system and thus under no one's control.

These things will be considered during the tariff determination. I cannot discuss them here.

Since the day I have joined, I have found no interference. There has been no interference. All that happened before I came and I cannot comment on that. I have full freedom to do what I want to do as per my duties and responsibilities.

Yes of course. On a pilot project basis, NDPL has already started it and they are soon going to launch it and this is a very good initiative of the energy consumption and energy efficiency and demand side management. This is a totally clean energy, for instance, if you are able to save, say 100 MW, that means 100 MW you have done without creating any additional network or anything. This means that without creating any pollution you have 100 MW, this scheme only results into that.