Delhi Electricity Tariff Economics
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Transcript of Delhi Electricity Tariff Economics
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8/12/2019 Delhi Electricity Tariff Economics
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What Determines Electricity Tariff
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What determines tariff
Contents
Bulk Power cost
Distribution cost
Tariff Comparisons Across
Geographies
Summing Up
Slide 2
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Electricity: Value chain (G T D)
Fixed Cost Fuel Cost G+T+D COSTS GO INTO
G
Transmission Cost
Charges Losses
BUILDING
TARIFF
Distribution Cost
AS SEEN BY END D
O&M Cost Financing Cost Losses
Slide 3
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What determines Tariff (80:10:10)
Three main com onents
Power Purchase (80% of total cost) Generation cost Transmission cost
O&M Cost includes Repairs & Maintenance cost
O&Mcost
cost
Employees cost Administrative cost
Financial Cost includes
PowerPurchase
Cost(G+T)
eprec a on Interest TaxDDG T G+T+D
Slide 4
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o upp es u ower o e
100% power is sourced from Govt plants
All are under long term PPA
Rates are CERC/ DERC approved
Fuel cost increase in Generation is fullass throu h to Discoms
Discoms have absolutel No control over Bulk Power Cost
Slide 5
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Bulk Power Cost (G+T): Sharp Increase in recent years
5.38
5.71
Generation ComponentTransmission Component
Cost in Rs / Unit
3.43
.
300%
1.39
1.74 1.942.09
2.41.
.
Slide 6
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Generation Cost: Significant Increase
,
Imported coal is 4 times more costly Blending up to 30-40% by NTPC plants
Higher transport cost
Coal sourced from longer distance
Consistent Increase in transportation cost
Higher fixed cost from new plants
More than 60% power from new plants
New plants fixed cost: Rs. 3 per unit
Old plants fixed cost: Rs. 0.6 per unit
Slide 7
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Delhi Electricity Tariff Hikes in last 10 years
17%21%
20%RST 65% Increase
Rs / Unit
65% of Tariff hike has effectedin last 10 yearsNo Hike
Majority of the hike : 45% hashappened in last 2 years
Almost zero tariff hikeappene or years
Mere 17% tariff hike in firstcontrol period
Inadequate tariff led to huge un-recovered cost of Rs. 20,000 Cr
Slide 8
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ver ncreas ng revenue gap
~Rs 14 800 Cr Re ulator Assets for BSES Discoms alone
Partic ulars (Rs crs) BYPL BRPL BSES NDPL Total
Upto FY 09 -26 612 586 351 937
FY 10 533 1,068 1,601 751 2,352
FY 11 1,121 1,546 2,667 964 3,631
FY 12 2,216 4,233 6,449 1,783 8,232
FY 13 *E 1,690 1,779 3,469 885 4,354
Total Gap 5,534 9,238 14,772 4,734 19,506
Slide
Absence of cost reflective tariff led to huge unrecovered cost, Rs.~ 20,000 Crs
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oss e uc on a
Huge Savings to Government
Rs.37 500 Cr till date
AT&C loss reduction : 57% to 17%
Commercial loss r eduction : 45% to 5%
Rs.7,500 Cr/yr, 25% of Delhi budget
More money available for Schools, Metro & Buses etc
Hospitals & Infrastructure etc
Reduced subsid out o* Provisional, yet for true up
Slide
,
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Operating Cost: Drastic Reduction
NDMC : 1.13
Kerala : 1.00 Bihar : 0.88 Punjab SEB : 0.86
CPI increased by 120% in past 10 yrs
Des ite inflation O eratin cost reduced b 45% (TPDDL) : . BSES : 0.55
76 to 55 paise/unit , huge operational efficiency
Cost reduction is despite providing world class
customer services
Slide
n re ene o opera ona e c ency passe on o cus omers y ower ar
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Recapitulating how Discoms have fared
Slide 12
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c ency mprovement: ene t ng ovt. ustomers
300% hike in ower cost should have
resulted in 300% retail tariff h ike
As it constitutes 80% of total cost
World record AT&C loss r eduction
Reduction in Operating expense
.
Kept requirement of tariff hike to 90%
Mere 65% (untimely) hike led to
Power cos t(% hik e) Retail tarif f (% hike) Savings(%) n-recovere cos s. , r
Slide 13
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0.55
oss e uc on ea ng o ower ar
Pre privatization Loss 57%
13.857.58 Consumer Retail tariff - Rs.6.55
5.71
Power AT&C Distr'bn Total
Required Tariff - Rs.7.40
With out privatization required tariffCost Loss Cost Cost
0.55
1.13
Post privatization Loss 17% would have been - Rs.13.85
An Increase of 110% from current level
7.405.71
Slide
Power Cost
AT&C Loss
Distr'bnCost
TotalCost
,Per Unit values for FY 13
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Commodities / Services
With Neighbouring Towns / Metros
Slide 15
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Power Tariff Vs Essential Commodities/Services
Slide 16
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ow essent a commo t es pr ces ave move
Commodity Unit FY 03 FY 13 % Increase
Dal Arhar Rs./Quintal 2,197 6,734 206%
Sugar Rs./Quintal 1,417 3,398 140%
. , ,
Meat Rs./Quintal 8,200 23,760 190%
Eggs '00 Nos. 127 319 151%
Source: Delhi Govts statistical handbook, based on price index of Delhi
Ghee (Desi) Rs./15 Kg 1,930 4,439 130%Note: FY 13 figures are arrived at by 8% increase in FY 12
Slide
Prices of Essential Commodities have Increased by avg. 170%
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ow erv ces pr ces ave move
DTC DJB DMRC
Since ince tionLast 10 earsincreased by 100%gone up by 150 %
gone up by 200 %
Slide 18
.
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ow ue pr ces ave move
Slide 19
r ces o ue ave ncrease y avg.
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ow ropert es pr ces ave move
CLASS A B C D
2007 43 34 27 22
2012 645 205 133 106
Growth (%) 1400 500 388 388Rate in 000 /sqmtr
Prices of Properties increased massively by 670%
Slide 20
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Power Tariff Vs Neighbours / Other Metros
Slide 21
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power ar compare o o er e g our ng owns
than its neighboring towns Delhi has better power quality
7.7 7.9 8.2 8.17.1
24X7 supply Reliability Index @ 99.98% Stable voltage
ower cos n o er owns s an what is in Delhi,
To compare same quality of 24x7 power
Note: *08 hrs Load shedding/day impact is taken for NCR towns Alternate power during shed hours taken at Rs 16/unit All calculations are for 200 units of monthly residential consumption
DELHI customer a s substantiall lower 1/3 rd com ared to other towns
Slide 22
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power ar compare o er e ro es
Note: Tariff comparison for Domestic usage @ 200 units per month
Slide 23
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Recent Tariff Revision Trend Across Country
Slide 24
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ow as power ar ncrease coun ry w e
All states hiked tariff last year
Top 3 states in hike:
Tam na u 37%
Kerala 30%
WB (CESC) 24%
Average hike of 16%
A welcome change which has to
continue
Tariff hike has contributed towards restoration of Health of Discoms
Slide 25
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Summing up
Slide 26
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umm ng up: conom cs o e ec r c y ar
80% of total cos t is Power cos tIncreased Uncontrollable cost
Retail tariff should have gone upby
y
300% As 300% escalation in
power cost
Savings due to Huge efficiencygains
210%40% reduction in AT&C loss
& Operating cost
Reduced tariff hike required dueto huge efficiency gains
Tariff hike effected
90%
65%
Entire gains passed on toCustomers & Govt .
Untimel & Inade uate hike
Un recovered Gap in Tariff hike 25%
Leading to huge underrecovery of Rs. 20,000 Crs.
Slide 27
Over last 10 yrs period
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umm ng up: r ce ncrease across e oar
670%
Compared to very Bulk Power Cost 300%
of other itemsDearness
Allowance250%
Delhi Power Tariff
has gone up by mere Essential Comm 170%
65%Services 150%
Slide 28
Index
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esp e pec acu ar urnaroun ,
in absence of Ade uate Tariff
Discoms are facing Financial Crisis
Slide 29
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Thank You
Slide 30