Regulatory body finds faults with discoms’ accounts
Discoms show losses in accounts, say banks don’t give them loans
GN Bureau | New Delhi | June 01 2010
The Delhi Electricity Regulatory Commission (DERC) has found discrepancies in the petitions submitted by the three power distribution companies (discoms) to the chief minister’s office in Delhi on May 3.
In the detailed letters sent to the discoms on Monday, the DERC points out that their accounts show profits as against the arguments presented by them.
DERC in its letter has concluded that Bongaigaon Refinery and Petrochemical limited’s (BRPL) net worth for 2009-2010 is Rs 575.88 crore, BSES Yamuna Power Limited’s (BYPL) net worth is Rs 320.66 crore, and North Delhi Power Limited’s (NDPL) is Rs 1,561.10 crore. Meanwhile, in the petition, the discoms argued that they had no money and because of their poor credit image, the banks do not lend them any.
After the petitions, the chief minister intervened and asked the DERC to stall the tariff order till all issues are clarified.
The DERC writes, “The above mentioned factual position is based on the audited accounts submitted by you and the report of your own credit agency.” The regulatory body has also asked the discoms to respond within a week if they feel that, “the figures in the audited accounts or in the report of the credit agency contain any discrepancies”.
The discoms, on the other hand, plan to argue that the DERC has misinterpreted the accounts. They claim that the DERC owes them Rs 4,500 crore as regulatory assets, which when added to the audited accounts reflects a profit.
Regulatory assets are the gap between the projections made by the DERC in its tariff order during a certain financial year and the actual expenditure incurred by the discoms. A senior BYPL official told The Indian Express, “In the audited accounts, we are legally bound to follow the mercantile system of calculating income. This system reflects future plausible revenue. In the Aggregate Revenue Requirement, submitted to DERC, we show actual cash flows. So, naturally a gap exists.”
If the discoms accept that there is discrepancy in their accounts, it would be like admitting that the figures have been tampered with, a Power department official said. The DERC also noted: “No letter from any lender has been presented by you (discoms) to establish that they have refused loan on the ground that your net worth, from the lender’s perspective, is inadequate.”
Post new comment