Discoms move court over DERC norms on retail tariff in capital

NEW DELHI:  Delhi discoms have approached the court against  Delhi Electricity Regulatory Commission over its ‘Business Plan Regulations’, an official said on Sunday. The discoms challenged the regulations issued by the power regulator in the High Court earlier this month, they said.

The matter is sub-judice so nothing can be said on record, said an official. The Business Plan Regulations, when issued had invited, the discoms to give their objections and suggestions but it is “unfortunate” that instead of approaching the DERC they took the matter to the court, he said.

“The discoms are pushing self-interest as public interest. They are opposing the business plan regulations because it plugged all the loopholes they used to approach courts and get the annual tariff influenced to their benefit,” he added.

“Many aspects of the Business Plans Regulations are in contravention of law and it has been challenged on various grounds, including violation of the principles of the Electricity Act, 2003, for being released without a public hearing and that it is against  DERC’s own tariff policy,” said the official.

Business Plan Regulations are the DERC-framed rules for determining retail tariffs in Delhi. The Delhi power utilities submitted their Aggregate Revenue Requirements, considered as the annual budget for the financial year 2023-24, to the DERC, as mandated, on May 22, said the official.

After a plea was filed by the discoms, the Supreme Court has directed the Delhi High Court to hear the case in the upcoming week. The hearing is scheduled for May 29, he added.  One of the primary issues raised by the Delhi discoms is the decrease in return on equity (ROE) from 16 per cent to 14 per cent by the Business Plan Regulations. “The consequence of Business Plan Regulations are profound, with an expected adverse impact of around `850 crore on the three discoms,” said the official.

These regulations have been challenged on several grounds, including the violation of Section 61(a) of the Electricity Act. This Act requires the DERC to be guided by Central Electricity Regulatory Commission principles and methodologies for tariff determination.