SC breather for R-Infra power discoms

Court directs NTPC to continue supply till March 25

The Supreme Court on Friday averted a major power crisis in the national capital by ordering state-owned generator NTPC Ltd not to cut electricity supply to Reliance Infrastructure-owned distribution companies till March 25. It also directed the distribution companies to pay Rs 50 crore to NTPC within two weeks.

On Thursday, BSES Yamuna (BYPL) and BSES Rajdhani (BRPL) had approached the apex court, seeking a resolution of the dispute with NTPC, which had refused to continue power supply after February 10, citing payment delays.

"We have to look after the people of Delhi. The consumers should not suffer," a Bench comprising judges S S Nijjar and A K Sikri said at the end of the hearing. They told the NTPC counsel the company wouldn't get the payments by cutting electricity supply. "This is not the right attitude," the Bench said.

Following the order, BSES said prompt payment of the collective "dues" of about Rs 450 crore by the Delhi government and the Municipal Corporation of Delhi would hasten the payment to NTPC.

Earlier this week, NTPC had encashed letters of credit (a payment security mechanism) of the distribution companies.

During the hearing on Friday, NTPC said it was under financial stress, as the two Reliance Infrastructure-owned distribution companies owed it Rs 96 crore. It added now, letters of credit, too, weren't there. However, Mukul Rohatgi, the distribution companies' counsel, said: "We (BSES) are not running away. We are half-government (the Delhi government has 49 per cent stake in the distribution companies) and NTPC is full-government. All these issues can be adjusted. Meanwhile, the people of Delhi can wait for two or three weeks."

The counsel said the companies had made huge investments and expected returns from business. If power supply was restricted on account of some "populist" measures, distribution companies would have to take loans and the amounts would spiral, he added. Power purchase cost and transmission charges account for about 80 per cent of the cost of supply.

The counsel said the distribution companies weren't receiving their dues of Rs 15,000 crore, as the regulator (Delhi Electricity Regulatory Commission) hadn't decided upon the cost. In the past eight years, arrears had risen, while litigation has been pending in the Supreme Court for three years.

Addressing the distribution companies, the judges said: "You are in business. If it is not profitable, you must make other arrangements." They added unless all the issues raised in several petitions were decided, a final order couldn't be passed. They scheduled the final hearing on the case for March 25.

In a related development, three distribution companies - BYPL, BRPL and Tata Power Delhi Distribution - moved the Delhi High Court against a single judge-bench order that denied a stay on an audit of the distribution companies' accounts by the Comptroller and Auditor General, which was sought by the Delhi government.