New Delhi, March 22 Electricity rates in the city are likely to rise from April as the Delhi government is preparing to disburse pending dues of over ₹38,000 crore to the three power distribution companies, officials said on Sunday.
The government is, however, planning to subsidize the increase in power tariffs to mitigate the impact on consumers, they said.
The Supreme Court in August last year had directed that the regulatory assets, including carrying costs of ₹27,200 crore, be paid to Delhi's three private distribution companies, BRPL, BYPL, and TPDDL, over a period of seven years.
Regulatory assets – costs that are expected to be recovered in the future – have risen sharply due to the lack of any increase in power tariffs under the rule of the Aam Aadmi Party in the past decade.
The Delhi Electricity Regulatory Commission (DERC), the city's power regulator, informed the central agency, the Appellate Tribunal for Electricity (APTEL), in January that the total regulatory assets in Delhi stand at ₹38,552 crore.
According to the DERC filing, the outstanding amount includes ₹19,174 crore for BRPL, ₹12,333 crore for BYPL, and ₹7,046 crore for TPDDL. These amounts represent the expenditures incurred by the distribution companies for supplying electricity.
The increase in the original regulatory asset amounts is due to the accumulation of interest due to the delay in recovery, they said.
The court had also directed DERC to prepare a recovery plan, account for carrying costs (interest), and conduct a detailed audit explaining the prolonged delay in cost recovery.
The recovery is likely to be made through an increased regulatory asset surcharge on electricity bills over a seven-year period.
Delhi Power Minister Ashish Sood said in March last year that the distribution companies were authorized to recover the ₹27,000 crore in regulatory assets, hinting that electricity rates may increase in the city.