If not paid, NTPC can cut power supply to BSES discoms

BSES discoms told to pay NTPC Rs 690 cr by May 31

The Supreme Court on Tuesday allowed state-owned power generator NTPC to cut power supply to Delhi’s two BSES distribution companies, if the Reliance Infrastructure-owned firms failed to clear the Rs 690-crore past dues by May 31.

A Bench of judges Surinder Singh Nijjar and A K Sikri said the two companies were being asked to clear their current dues with effect from January 1 this year. “Non-payment of the dues will lead to vacation of stay on disconnection notice served to BSES by NTPC.”

BSES Yamuna Power (BYPL) and BSES Rajdhani Power (BRPL) had in February approached the Court seeking a resolution of a dispute with NTPC, which had refused to continue supplying power over delay in payments for December and January.

BSES discoms responded by saying they would again move the Delhi Electricity regulatory Commission to make the current rates cost-reflective, to facilitate full compliance with the Supreme Court order. “BSES discoms are already making payments of over 80 per cent of current dues to power generators based on current rates,” BSES said in a statement.

Senior counsel Mukul Rohatgi, appearing for the BSES discoms, told the Court his clients were struggling and could not remain afloat, unless the Rs 20,000 crore of payment dues from consumers were cleared. However, making a distinction between current and historical liabilities, judge Sikri said: “Outstanding dues are one thing; there can be a road map. What we are talking about are current dues.”

The two BSES discoms supply power to 70 per cent of the city’s 3.2 million consumers, while Tata Power Delhi Distribution Ltd (TPDDL) caters to the rest. The two BSES firms source as much as 60 per cent of their power requirement from NTPC. The generator had threatened to cut 2,000 Mw of supply to BSES for non-payment of dues.

Tuesday’s order came as a dampener for the discoms, which had been rejoicing after the Delhi Electricity Regulatory Commission (DERC) recently announced a plan to liquidate Rs 8,000 crore of Regulatory Assets (RA) or past revenue dues to be paid to Delhi discoms by consumers. A rising gap between cost of supply and retail rates over the past 12 years since privatisation has pushed RAs to Rs 27,000 crore as on March 2014.

NTPC had last week sought the apex court’s permission to begin regulation of power supplied to BSES firms, arguing nearly 75 per cent of the payments received from these two firms go to Coal India Ltd, and if the two companies do not pay, NTPC’s Badarpur thermal plant will not be able to supply electricity to Delhi.

With Tuesday’s order, the apex court has sought to put an end to the drama over power supply in Delhi that began after former chief minister Arvind Kejriwal on December 31 announced a 50 per cent cut in rates through subsidy, followed by a Comptroller and Auditor General audit of discom accounts.