Clearing the controversies & confusion caused by Delhi LG surrounding the power subsidy, the Delhi Government has unequivocally stated that the subsidy will not be curtailed and will continue as it is for all the people of Delhi. The clarification from the government came after the LG Office circulated a note illegally recommending changes in the power subsidy policy. Under pressure from the PMO to stop the power subsidy in Delhi, the LG had instructed the Power Department to withdraw Delhi Government’s power subsidy based on flawed legal advice. However, in a letter dated 06.01.2023, DERC had recalled its prior advice to Delhi Govt on curtailing power subsidy to consumers having connections of fixed load above 5kW or 3kW. After detailed examination of various legal provisions of Electricity Act 2003 and prior SC judgments, DERC had concluded that it has no legal basis or jurisdiction to advise the Delhi Govt about withdrawal of subsidy for any category of consumers.

Power Minister Ms Atishi issued a statement on Monday saying that the government has no plans to discontinue power subsidy for any consumer of the state. “CM Arvind Kejriwal is committed towards providing 24×7 free electricity to the people of Delhi. Our power subsidy is not going to be altered. The LG office is deliberately spreading misinformation regarding it,” she said.

She also shed light on the controversy caused by the LG’s obstruction, saying, “The PM wants to discontinue power subsidy in Delhi. It is under pressure from the PMO that LG issued such a statement. However, in these days of inflation, the power subsidy has provided a huge relief to the common man in Delhi. The working and middle class of Delhi are grateful to CM Shri Arvind Kejriwal for this relief. It is the Kejriwal Government’s commitment that the power subsidy will continue.”

Ms Atishi informed that the Delhi Electricity Regulatory Commission (DERC) had withdrawn its advice regarding the Power Subsidy back in January 2023. The then Deputy CM and minister-in-charge of Power, Shri Manish Sisodia had written to DERC Chairman requesting it to re-examine the issue and give fresh opinion on the matter since more than two years had elapsed since DERC’s last advice. The DERC upon receiving this request, carried out a detailed legal examination on the matter and placed its fresh opinion through an order dt. 6th January 2023 retracting it’s prior ‘statutory advice’, on legal grounds.

In its detailed order, the DERC pointed out that as per Section 86(2) of Delhi Electricity Act, 2003, the commission can advise the government only on four defined matters. The matters include (i) promotion of competition, efficiency and economy in activities of the electricity industry; (ii) promotion of investment in electricity industry; (iii) reorganisation and restructuring of electricity industry in the State; (iv) matters concerning generation, transmission, distribution and trading of electricity or any other matter referred to the State Commission by that Government.

The issue of Power Subsidy does not fall into any four of the specific areas under Section 86(2) of the Act and instead comes under Section 65 of the Act, which is the exclusive domain of the State government. Thus the Commission concluded that its prior advice regarding the subsidy was legally incorrect and without jurisdiction. Explaining the situation, Ms Atishi said that given the very fact that the DERC does not have any jurisdiction to oversee power subsidy, its advice on the matter is misplaced and incorrect. “Realising the discrepancy, DERC itself clarified that their previous statutory advice stands null and void as of date.”

She informed that the DERC Chairperson in his order had also denounced the rationale used by the previous commission members to issue such an advice. Notably, remarking on the suo-moto nature of previous statutory advice of the commission, the DERC Chairperson in his order stated, “The whole idea of suo-moto advice appears to be that the problem of Pension trust surcharge was to be resolved. Hence, an advice totally uncalled for in the circumstances was given, perhaps in good gesture, but totally misplaced. This gesture, however, practical or good, it may sound but it has to fulfill/justify the parameters of law.”

The DERC Chairperson further stated in his order, “It is also worthwhile to recall that the advice has been given during the COVID period which was a dark hour in the history of mankind. The whole World, India including Delhi was affected by COVID. All things naturally had gone haywire… Maybe some of the factors of the period also were wandering in the mind of the Commission at that time.”

Citing this detailed order issued by DERC, the Power Minister further questioned the LG’s intent behind such a move. “All these documents are on file. If we are aware of it, so would the Delhi LG. It is worth questioning how the Delhi LG asked the government to alter the subsidy policy when he already knew the advice was legally incorrect?” Ms Atishi further informed that the government had not received any noting or file from the LG office in this context and got to know of the issue through the media only. “It is clear that the LG wants to impede upon the functioning of the government by hook or by crook and is acting with malice,” she said.

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