DERC cannot revise power tariff payable to discom in the guise of prudence check

As per the Supreme Court, Delhi Electricity Regulatory Commission (DERC) cannot revise or re-determine the already fixed power tariff for discoms in the guise of prudence check and truing up as it would amount to amending the rates to be levied from consumers.

Prudence check relates to scrutiny of reasonableness of capital expenditure incurred or proposed to be incurred, while a true up claim is the expenditure incurred by a utility over and above the annual revenue. The Supreme Court bench allowed the appeal of private discom BSES Yamuna Power Limited challenging certain findings of the Appellate Tribunal for Electricity (APTEL) in a 2014 judgment by which the downward revision of electricity tariff by DERC was upheld. Setting aside the DERC order, it said the power regulator cannot amend the tariff order for the period April 01, 2008 to March 31, 2010 in the guise of true-up after the relevant financial year is over and the same is replaced by a subsequent tariff order.