HIGHLIGHTS OF THE C&AG AUDIT REPORT ON THE PRIVATE POWER DISTRIBUTION COMPANIES (DISCOMS) IN DELHI, NAMELY BSES RAJDHANI POWER PVT. LTD.(BRPL), BSES YAMUNAL POWER PVT LTD. (BYPL) and TATA  POWER DELHI DISTRIBUTION  LTD.(TPDDL), AS PER PRESS REPORTS.

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  • The previously incurred losses , called Regulatory Assets, were inflated to the tune of Rs. 7, 956.91 crore. These inflated losses are recoverable from consumers if permitted by the regulatory authority, i.e., Delhi Electricity Regulatory Authority (DERC). In fact, these losses of the three DISCOMS operating in Delhi stood approved at Rs. 13,657.87 crore as on 31/03/2013, of which the inflated sum amounted at least to Rs. 7,956.91 crore.
  • The Energy Meters actually installed and put to use can be included as fixed assets on which DISCOMS are allowed returns. As on 31/03/2013, BSES Rajdhani Power Pvt. Ltd. (BRPL) had declared 22.10 lakh Meters as part of their fixed assets though the number of consumers was 18.49 lakh only. The number of consumers intimated by BRPL to DERC differed widely when compared to the billing data furnished to the Audit. BYPL had capitalized 16.94 lakh Meters though the number of consumers was 12.89 lakh only. TPDDL claimed to have installed 11.93 lakh Meters from 2008-09 to 2012-13 though only 3.83 lakh new consumers were added during this period.
  • Meters removed from the premises of the consumers are sold as scrap. BRPL claimed to have discarded 9.96 lakh Meters during the period from 2005-06 to 2011-12. However, the meter utilization data indicates that 14.41 lakh Meters were actually removed from the premises of the consumers. Thus, 4.43 lakh Meters valued at about Rs. 58.39 crore remained unaccounted for.
  • The Audit has held that because of discrepancy in Meters, BYPL and BRPL imposed an unjustified burden of Rs. 65.24  and Rs. 63.06 crores respectively on consumers.
  • The cost of replacing defective Meters during warranty period was not recovered from the manufacturers, but was passed on to consumers. In this manner, BRPL inflicted on consumers a financial burden of Rs. 12.09 crore and TPDDL a burden of Rs. 27.54 crore.
  • The quantum of power purchased by DISCOMS exceeded the quantum actually consumed  during most part of the year.This meant that the consumer paid for higher load for the whole year though this higher load was consumed only for a few hours during the whole year. Until 2009, the DISCOMS sold the surplus power at a profit but later incurred  losses on its sale. This increasing loss widened the revenue deficit of the DISCOMS , which in turn increased the Regulatory Assets  and tariff burden on the consumers.
  • The Audit held the Reliance-led DISCOMS of uneconomical and inefficient operations, leading to operational losses and negative net worth. The Audit further held that the burden of inefficiencies of DISCOMS reflected in the shape of higher rate of weighted average cost of capital and carrying cost on Regulatory Assets, which was passed on to the consumers.
  • The DISCOMS also paid significant amounts as annual fixed charges to some power generating units with whom they had long term power purchase agreements though they hardly bought any power from them. During the period of audit these ‘dead costs’ amounting to several hundred crores of rupees had to be borne by the consumers.
  • The C&AG Audit also raised serious questions about the conduct of the Delhi Government, its nominees on the Boards of DISCOMS, and the DELHI Electricity Regulatory Commission (DERC). The Delhi Government invested Rs. 744.80 crore in the DISCOMS in a fresh round of investment without demanding any effective control on the company. On the other, hand its nominees on the DISCOM Boards did not attend Board meetings regularly. DERC failed to take any action against BRPL and BYPL when the Administrative Staff College of India, to whom DERC had entrusted the job of verifying capital investments made by DISCOMS, brought it to the notice of DERC that these two DISCOMS did not furnish certain vital details of their assets acquired over the previous seven years and had also refused to furnish information about assets procured from their sister concerns.

                                                                                    [SOURCE: THE TIMES OF INDIA DELHI EDITION DATED 18/08/2015]

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