Professional Documents
Culture Documents
evaluate
the
neutrality
of
In case of Delhi where the governments approach was more liberal for the investors
and had lot of political pressure onto making privatization in electricity a success in
Delhi giving a good signal to the investors as investors were the need of the hour. The
Delhi Electricity Regulatory Commission (DERC) was given the responsibility to
formulate policies to accommodate a successful privatization bid. It had lot of
constraints on the DERC on providing logistic and materialistic support to it. It could
not hire efficient staff and had to rely on advice of outside consultants thus endangering
its credibility. . The relationship between regulator and consultant was based on
different technical outputs that DERC staff didnt had familiarities on different models
that the consultants were performing thus resulting in consultants dictating terms of
regulation. The DERC separated transmission and distribution and gave the
distribution rights to TATA Powers and RELIANCE Power where Delhi government
was in joint venture with Tata power. The uniqueness of the tenders given was that the
company promising fewer reductions in technical and commercial losses was awarded
with the tenders. Rewards and incentives were based on their total performance in
reduction levels. The constrained DERC was expected to monitor and manage the
irregularities, lack of transparency and accountability issues. Regulator was further
boxed in by the Delhi government's declaration up front of a assumptions about the
total subsidy cap for the transition period, which necessarily included trajectory of
tariffs. High political pressure and influence led to policy capture of the DERC in terms
of performance targets control thus creating loophole for the discoms but it could decide
on the uniform tariffs rates across all discoms. The DERC was pressurized by Delhi
government to implement a Multiyear tariff. Lot of political interference in day to
day work of regulator made it weak and feeble and had assumed role of an auditor
instead of regulator. Not all stakeholders parallel interests were taken into
consideration while ignoring one or the other into the process.
Conclusion:
All the three states were able to regulate reforms acc to the priorties of the political
class, public and private companies. As an independent regulatory body is supposed to
have miniature influence on the regulatory body and its supposed to take care of
interests of all the stakeholders , I think both the DERC and OERC have failed in
attempt to have a independent regulatory bodies whereas APERC was successful
because it looked after the profits and also did not burden the public by raising tariffs.
A regulator should take hard steps when there is chance of endangering the whole
purpose of its existence like APERC will cut connections on default payments and fine
industries for over-usage.