One of the biggest election promises of the Aam Aadmi Party was to slash the electricity bills by half. Most laughed at such a prospect, saying that the subsidies that will be offered by the government tomake this possible would add to the tax burden of Delhites, besides resulting in long power cuts, which Delhites were already burdened with.

But the way, AAP has tackled the problem on multiple fronts, to ensure that the bills were indeed halved, making electricity charges in Delhi, the cheapest and also ensuring that Delhi gets 24 hours of uninterrupted power supply which only Mumbai boasts of, is quite an achievement.

Right now Delhi provides the cheapest electricity in the country at Rs 500 only for 400 units, while Mumbai (Tata) pays Rs 3084 for the same, and which has stayed constant since 2015.

Though this amounted to a Rs 1700 crore subsidy initially, the consumers have not been taxed additionally for the same. In some cases, the bill continues to be reduced anywhere between 7-25 %. This, despite the fact that Delhi buys electricity from states like Madhya Pradesh, where electricity charges are 3-4 times higher than Delhi. Even neighbouring Noida, pays three times more for electricity. The state revenues too continue to grow every year despite the subsidies, rising from Rs 33,436 crores (proposed) in 2012-13 to Rs 60,000 (proposed) crores for the financial year 2019-20.

Capital budget of Delhi government from 2012-13 to 2019-20

Before AAP took over, the previous Congress government continued to increase electricity charges every year, making it one of the highest in the country. Every state government, especially the BJP ruled states increased electricity charges, as soon as they assume power. This is because power companies are one of the biggest donors of ruling parties, and an increase of even Rs 5-10 in the total bill amount, is a source of huge revenues for these power companies, which they share with the respective parties in power.

The AAP government too could have allowed these power companies and DISCOMS to have their way and direct some of its revenue, to boost its party funds, to enable fighting elections in other states, but then they would have been able to fulfil their commitment to the people.

When questioned about this, Delhi’s former CM, Sheila Dikshit insisted that this model was “suspicious” and needs to be studied, to figure how the AAP government did it.

This solution oriented AAP government in Delhi did more than just reduce electricity bills by half. For the very first time they insisted that the three DISCOMs (Distribution Companies) operating in Delhi, who buy electricity from other states and sell it in Delhi at inflated rates, submit themselves to a CAG audit. It was found out by the state government that these DISCOMs were maintaining a Zero accounts statement, when for instance they would provide electricity to say airports, but would show it as supplying them for free. For years, these DISCOMs claimed to be making loses, as an excuse to increase electricity charges every year. And yet here were long power cuts, in summer and winter, despite the high charges.

The minister in charge of power Satyendra Jain, also shopped around to find power companies who were willing to sell electricity to Delhi cheaper, the benefits of which were passed on to the consumer.

They also helped resolve large numbers of electricity theft cases, most of them false, where even slum dwellers would receive bills in lakhs, which would be unresolved for months and years. For all such cases, the government fixed a flat amount of Rs 250 to be paid for every month of the unpaid bill. Late surcharges were removed, reducing the burdens by 80-90%, and streamlining the entire process.

Compare this to the Electricity Amendment Act 2018, sought to be passed by the Narendra Modi government, in the last session of parliament in November-December, just before the all important Lok Sabha elections. One of the prime motives of which was to end cross subsidies, which distinguishes between commercial and residential rates and has different slabs for different sections of society, like reduced rates for farmers.

Illustration of electricity rates after the implementation of Electricity Amendment Act 2018

The amendment suggests replacing it with a flat rate, which would effectively increase the electricity bills by 4-5 times, for residential and agricultural consumers and reducing it for industries, to bring them all on par. The act sought to not only centralise the whole process, but also give itself immense power to favour DISCOMs and power supply companies of their choice, especially the Ambanis. At the moment, the individual states fix electricity rates and subsidies on it.

The central government had tried to pass this amendment in 2014 as well, but was unsuccessful both times. One of the supposed benefits of this amendment was 24 hour power supply throughout of the country which the AAP government managed to do it at their level itself, without any help from the centre. Arvind Kejriwal was the only chief minister who raised concerns on the dangers of centralizing the electricity distribution process in the country.