The Supreme Court said that the Delhi Electricity Regulatory Commission (DERC) should prepare a roadmap on how, when and how much the electricity rates should increase in the capital. According to the report, the increased electricity rates will be applicable to all types of consumers.
Electricity rates may increase in the country’s capital Delhi. The Supreme Court has given permission to increase electricity rates in Delhi during the hearing of a case. The Supreme Court has said that the increase in electricity prices should be reasonable. The court has laid down some conditions while giving permission to increase electricity prices. The court has said that the increase should be affordable and should not exceed the limits set by the Delhi Electricity Regulatory Commission.
The Supreme Court has said that electricity rates can be increased in Delhi but it should remain reasonable and affordable.
The court said that the Delhi Electricity Regulatory Commission (DERC) should prepare a roadmap on how, when and how much the electricity rates should increase in the capital. According to the report, the increased electricity rates will be applicable to all types of consumers.
Let us tell you that this decision of the Supreme Court can affect other states of the country including Delhi. Actually this matter was related to the litigation going on for years regarding the pending payments of the electricity distribution companies. On Wednesday, the Supreme Court directed to liquidate all the pending regulatory assets within four years.
This means that in states where regulatory assets have been pending for decades, electricity rates will increase for everyone – personal, residential, commercial and industrial – over the next four years.
Here regulatory assets mean the dues payable to the electricity distribution companies. These dues are for the supply of electricity to the states/union territories.
The suit was initially filed by Delhi’s power distribution companies BSES Yamuna Power, BSES Rajdhani and Tata Power Delhi Distribution Ltd. However, during the hearing, the Supreme Court expanded its scope and issued notices to all the states where the dues of the power distribution companies had accumulated.
In its verdict, the bench of Justice PS Narasimha and Justice Atul S Chandurkar also reprimanded the State Electricity Regulatory Commissions and APTEL for failing in their regulatory work. The Supreme Court observed, “The disproportionate increase in long pending dues ultimately puts the burden on the consumer.”
The court also said that policies and rules have been made over the years to prevent such dues from accumulating. The court said in its order, “The inefficient and improper functioning and decision making of the Commission may lead to the failure of the regulatory commission.”
When an electricity regulatory commission passes a tariff order, the state electricity commission fixes the maximum price to be charged by power distribution companies. However, the electricity distribution companies have to spend more on purchasing and distributing electricity than the price they charge from consumers.
The loss incurred by the electricity distribution companies due to this is called “regulatory assets”. The State Electricity Commission and the State Government can decide that this loss will be paid later. But ultimately the consumers have to bear the loss. Because ultimately the consumers and the state have to pay interest on late payment.
It is worth noting that this pending payment in Delhi has been going on for 17 years. And this amount has increased to 20 thousand crores. In Tamil Nadu, this outstanding amount has become 87 thousand crores for 2024. Which has to be paid now. Its effect can come in the form of rising electricity prices.
