APSPDCL and APEPDCL together have sought a revision in the ARR of FY15, FY17 and FY18 which is as high as Rs. 15,200 crores in total. Of this, 28% of the revision is attributable to carrying cost accrual due to delay in process.

As the true-up process has significant impact on future tariffs and the finances of the DISCOMs, we hope the process takes place in a transparent manner with public scrutiny of crucial data on costs incurred and performance of the DISCOMs. Given the importance of true-up process in ensuring DISCOM accountability, providing an assessment of past performance and current financial status, it is suggested that:

• The Commission directs the DISCOMs to submit more detailed information based on actuals for power procurement, revenue sales, losses and distribution costs in a disaggregated manner for the years being trued –up.
• The additional data submitted by the DISCOMs should be uploaded on the Commissions website and a second public hearing should be conducted in the matter to ensure informed participation by consumers.
• In case of delay in submission, the carrying cost for the additional amounts claimed by the Commission should be disallowed.
• The Commission should also initiate a detailed process to review the performance of the DISCOMs as well as the state-owned generation and transmission companies under the 3rd Control Period to inform amendment of the tariff regulations and implementation of the MYT framework in the 4th Control Period.

Unless detailed scrutiny during true-ups is conducted in a comprehensive manner, the very objectives of the Multi-Year Tariff framework (to ensure cost efficiency and certainty, equitable sharing of risk between utilities and consumers and better planning processes) will not be achieved. This would be a lost opportunity for concerted action in a sector under crisis.