After a long wait of 17 years since Delhi first saw
reforms in the power sector, the supply still remains unreliable. Political
pressure and gross corruption in distribution companies have taken their toll,
and weary consumers absorb the shock, remarks Anil Sood, President of
Chetna, an NGO based in New Delhi.
In 1987 when I shifted from South (Andhra Pradesh) to
Faridabad (Haryana), for the first time we had felt the heat of summer when
there was undeclared power cut ranging from 4 to 8 hours a day. That time I did
hear stories about power position in Delhi, and yes, once in a while when we
stayed with our relatives at Delhi we found the difference as the frequency of
power cuts or failure of power supply was almost unheard of.
In 1992 I had a choice to stay either in Delhi or Faridabad -- the choice was
obviously Delhi. But this time, for the first year the power position was
satisfactory, but soon the undeclared power cuts and power failures started
surfacing. I had no clue about the power supply, the power sector and problems
related to demand and supply of power.
During this period I had informal interaction with some cable manufacturers who
were supplying cable to the then Desu (Delhi Electric Supply Undertaking). To my
horror, most of them were making money by supplying sub-standard cables to Desu
i.e. less number of strands in the cable or thickness of the strands was thinner
than the prescribed thickness or recycled plastic was used for insulating the
cable. This evoked my interest in the power sector and the reasons for frequent
cable faults and cable bursting came to my knowledge. But that was just a
It seems at that point of time, somewhere in 1991, a group of chief ministers
met to discuss the power sector and undertook to initiate reforms in the sector.
This was precisely the time in 1992 when T&D (transmission & distribution)
losses in Delhi shot up from 20 per cent to 50 per cent in 1998. The most
interesting aspect of the episode is that the person responsible for abnormal
increase in T&D losses became the champion of reforms when the Delhi Electricity
Regulatory Commission was constituted in 1999.
Genesis of reforms
By this time I too had realised that the power sector in Delhi was in shambles.
The reliability of power supply was at its lowest ebb. The rampant corruption
ensured that the interests of powers-that-be or the connected individuals are
protected and the general public is taken for a ride.
The political vote bank was protected by ensuring virtually free power supply
directly from the cable without any meter. It was a free-for-all situation. No
complaint was ever heard or addressed. The steel/furnace and other industry in
Delhi especially in non-conforming areas virtually enjoyed unlimited power
supply with limited payment in connivance with Desu and DVB (Delhi Vidyut
Board). The JJ clusters too enjoyed freedom of using water heaters or other
heaters for cooking, TVs, coolers and other gadgets free of cost at the cost of
the state exchequer, as the honest tax payer and the consumer was footing the
The only saving grace was that if one could muster up courage to reduce his/her
complaint in writing and follow up the same by taking down the telephone number
of the senior most official of Desu or thereafter DVB and bother them at odd
hours, some action was taken. But how many could actually exercise this option -
only a very few. DVB was the victim of vote bank politics, inefficient work
culture and greedy bureaucracy.
Since the situation was beyond redemption, accounts were not available and the
assets in hand could not be verified in absence of asset register, the
government in its wisdom had no option but to resort to 'power reforms.'
The thrust of power reforms was to invite bids from private power distribution
companies and hand over the distribution to them with certain incentives like
assured return on capital employed, sharing of revenue generated out of T&D
losses contained with consumers and of course contain the blatant fraudulent
abstraction of power by the political vote bank.
Thus the idea was to stop annual drainage of nearly Rs 1,200 crore out of the
state exchequer—the honest tax payer's money that was pumped in to keep the
ailing DVB afloat.
As the first step towards tariff adjustment exercise, DERC issued concept paper
in September 2000 with a view to seek public participation in the tariff setting
process, introduce transparency and public participation in the vital exercise.
The first order on the concept paper was passed on January 16, 2001 whereby
various contentious issues other than tariff setting were settled.
Thereafter the Commission passed the first order on May 21, 2001, whereby after
analysing the ARR submitted by DVB, the tariff was increased by about 22.5 per
cent in case of domestic consumers and overall tariff increase was about 15.75
per cent. DERC rejected multi-year tariff determination principles for 2002-03
Subsequently, in February 2002, DVB was unbundled and AT&C losses were
determined for various DISCOMS (distribution companies). The government of NCT
of Delhi, in order to encourage, granted a loan of Rs 3,450 crore. DERC issued
order for tariff determination for 2002-03, 2003-04, 2004-05, 2005-06 and
2006-07. DERC, in order to avoid 'tariff shock' to consumers, introduced the
innovative concept of 'regulatory asset.' Once the system of 'regulatory asset'
was put in place there was pressure on distribution companies to perform.
The T&D losses continue to be in the range from 39 per cent to 90 per cent in 19
districts of the Capital. In fact distribution companies recently claimed that
they have installed transformers whereby they can have complete data of power
supplied and power billed in each area.
Therefore, going by the logic offered by the companies, there should not be any
problem in detecting theft-prone areas and nabbing culprits. But the facts are
This year Delhi Electricity Regulatory Commission had invited suggestions from
the public on adoption of multi-year tariff and also on multi-year tariff
revenue requirements. I had opposed the basic concept of introduction of MYT
(Multi Year Tariff) on grounds that the companies are still not geared up to
face multi-year tariff.
Further, till date there is no addition in the generation capacity in the city.
The power is purchased from neighboring states.
The annual requirement was 3,500 mw a few years ago, has now gone up to 4,500
mw. The reasons are multifold increase in multiplexes, shopping malls and DMRC
No doubt, Delhi's power reforms have been a shocking failure, but where does one
look for solution?
[May 19-25, 2008]