DERC order about slums - request for withdrawal

On 31.03.04 there were press reports about a DERC
order to private distribution companies about
supplying electricity in slums. See, for example,

These made no reference to the DESU/DVB electricity
contracting system become a huge scam after DVB
privatization, interim CAG report about which was
briefly used to make a fuss before Assembly Elections.

The reports were uclear and the order unavailable on
DERC website. I knew that slum residents seeking a
hearing from DERC since 2002 had not been heard. My
own submissions, including at DERC Public Notice
hearing and to DDA, had also not been considered.

I got the impression that the order had been issued to
benefit discoms, score political points and cover up
the contracting scam ? all at huge cost to ALL
consumers. I have picked up a copy of the order from
DERC, am convinced this is the case, and have written
the following to ask DERC to withdraw the order.

Please take a look and, if you concur, do write to
DERC or do whatever else you think appropriate.

----------- Text of letter of 09.04.04 ------------

Chairman, DERC,
C-Block Shivalik, Malviya Nagar, New Delhi - 110017

Sub: Request to withdraw order of 26.03.04 to discoms
for electrification of JJ colonies
Ref: Copy of letter of 29.02.04 to DDA VC, referring
to / enclosing previous letters since 2002, etc

Above-mentioned order, reported in media on 31.03.04,
is not on DERC website. From copy obtained from DERC
yesterday it seems (para-1) discoms wanted to recover
following charges: (a) Rs.4000 Development Charge (DC)
as ARR expense, (b) Rs.1250 Service Line Charge (SLC)
from consumers (NDPL) / as ARR expense (BSES) (c)
Rs.175 pm Energy Charge, (d) Rs.600 Security. The
order clarifies (para-2) that DC applies to
unelectrified areas, not JJ colonies. What it does not
explicate is DC has already been recovered for JJ
colonies, electrified under DESU/DVB scheme, become
scam since privatisation, as noted in representations
pending before DERC and reportedly also by CAG.
Instead, the order, after clarifying that DC does not
apply, sets out (para-4) a scheme based on recovering
DC. This internal inconsistency makes the scheme /
charges set out in it unjustifiable:

* 'Cost of electrification, including HT lines,
distribution transformers, other equipment and service
line charges', ie, DC and SLC, is set at Rs.2400
(para-4(i),(ii)). The basis for this is not stated
(beyond mention of detailed analysis and mutual
discussions with discoms). The order merely apportions
this between JJ consumers (50%) and others (who will
pay for 50% ARR expense).

* DC (excess over SLC of Rs.1250 permitted by DERC,
03.06.03) is unjustifiable since not only is this not
permissible under DD Act 1957, HT lines, transformers,
etc, are already in place under DESU/DVB scheme, duly
paid for by JJ consumers / cross-subsidised by others.

* SLC is unjustifiable, as duly paid for service lines
are already in place and the order frees discoms from
responsibility for replacement (para-4(vi)) and
metering, with flat rate of 175 pm (para-4(iv)).

* Flat rate Energy Charge with 2 Amp MCB
(para-4(vii)), interpreted in media as 2 bulbs and 1
fan, is unjustifiable for not requiring discoms to
recover from those willing to pay more to, instead,
allow freedom to profit effortlessly and opportunity
to confiscate appliances under Electricity Act.

* Security, purportedly refundable (para-4(v)), is
unjustifiable since refundable deposit paid by
consumers to contractors under DESU/DVB scheme has not
been refunded even at time of eviction / resettlement,
after which consumers have to pay all charges again to

JJ (and resettlement) are in violation of Delhi Master
Plan ? awaiting mandatory housing for the poor
according to Plan, for which cross-subsidy has been
recovered from others and slum policy is sub-judice in
Supreme Court (with union, state and local governments
all party). Recovery of JJ charges meanwhile amounts
to profiteering, at cost of all consumers, from
failure to enforce Plan entitlements. This is not
something the state can facilitate discoms or condone
contractors for. This, nevertheless, is what your
order, issued without hearing and in disregard of
representations, in effect does.

As such, the references to 'economically depressed'
and their 'burden' on others (para-4) and 'innumerable
instances of direct hooking' by JJ consumers (para-3)
are exceptionable and DERC/GNCT touting this order in
media ? possibly in violation of model code of conduct
? as 'historic order' whereby slum dwellers will have
to pay 'less' is most exceptionable. This reality is
more accurately captured by the failure of DERC/GNCT
to protect 75000 consumers being evicted from Pushta
with nothing to force contractors to refund deposits
or stop contractors in resettlement from charging them
Rs.1900, and by case of Rangpuri Pahari where
contractor has pocketed Rs.44,00,000 from 600
consumers, for which discom terminated supply on
23.02.04. Since then, no action has been taken against
the contractor and mutual discussions have led to DERC
order for benefit of discoms. Consumers' complaints to
DERC/GNCT, however, remain pending since 2002,
including after Public Hearing yesterday, where an
invited representative was told he had been mistakenly
invited, just as I was told at so-called Public
Hearing of 25.09.03 where I raised the JJ issue among

In view of the above, you are requested to withdraw
this order and to expedite a scheme (preferably with a
genuine Public Hearing) that, instead of denying
electrification in JJ colonies to benefit discoms,
resolves the crisis that has arisen from DESU/DVB
contractor scheme turning into scam due to DERC
failure to incorporate it into DVB?s successor regime.

Gita Dewan Verma / Planner


For information, in continuation of letter under
* VC, DDA (also w.r.t. copy of letter of 06.04.04 to
Secretary, MoUD)

For information in case of violation of model code, in
continuation of copy of letter of 06.04.04
* Secretary, Election Commission

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