 "DERC says Kejriwal can't cut power rates, subsidy only way out?")
Aam Aadmi Party’s Arvind Kejriwal may have won many hearts and votes in Delhi by promising to bring down their power bills by 50 percent, but it seems the party won’t have it easy delivering on this promise.
According to an Economic Times report today,Delhi’s electricity regulator has said that the government cannot interfere in fixing tariff.
[caption id=“attachment_1313417” align=“alignright” width=“380”]  Arvind Kejriwal. Naresh Sharma/ Firstpost[/caption]
“The government cannot interfere in tariff fixation. It is a regulatory issue,” PD Sudhakar, chairman, Delhi Electricity Regulatory Commission, told ET.
“How do they (Aam Aadmi Party) propose to reduce the tariff ? We fix the tariff after due diligence and it is difficult to reduce tariff beyond a point as 70% of Delhi’s power comes from outside and we have no control over the cost of power,” the state power watchdog said.
The only way Kejriwal can fufill his promises is by offering a subsidy.
An earlier Business Standard report pointed out that bringing down tariff’s by 50 percent is an impossible task as distribution companies are already sitting on losses worth Rs 11,000 crore. “Bringing down revenues but keeping cost constant will add to their miseries and make them unviable, resulting in further power outages,” it noted.
There’s no way a political party can interfere with the tariff fixed by DERC.The rate fixed by them can either be rejected or accepted by the government of the state. In case if it rejects the rate, government will have to compensate the companies selling power.
The earlier Dikshit-led Congress government provides concessions to households consuming up to 400 units.The subsidy already in place cost the government Rs 550 crore. However, electricity rates still seem to be one of the biggest problems that Delhi faces.
So, either Kejriwal will have to take back his words or offer more subsidies to fulfil his promises.
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