Now, NTPC threatens to cut power to Rajasthan discoms

In a regulation notice to the discoms, NTPC has asked these to renew their line of credit to about Rs 188 cr

After Tata Power stopped its supply to distribution companies (discoms) in Rajasthan, now, state-owned power generator NTPC has raised the issue of payment with the three discoms in the state.

In a regulation notice to the discoms, NTPC has asked them to renew their line of credit to about Rs 188 crore. It added if this wasn’t renewed in three days (by January 13), NTPC would stop the supply of 1,258 megawatt to the three discoms---Jaipur Vidyut Vitaran Nigam, Jodhpur Vidyut Vitaran Nigam and Ajmer Vidyut Vitaran Nigam.

These discoms owe Rs 95 crore to NTPC and the company has raised bills of about Rs 272 crore. Their line of credit of Rs 121 crore had expired on December 31, 2012. “Since Rajasthan discoms have not extended the validity of the LC (line of credit) in spite of repeated follow-ups, a notice for regulation of power supply on Rajasthan discoms is hereby given for affecting the regulation of power supply to Rajasthan discoms, according to the provisions of the Central Electricity Regulatory Commission (Regulations of Power Supply) regulation,” said the NTPC notice.

Last week, Tata Power had cut supply to Rajasthan state discoms after these failed to pay Rs 96.2 crore of dues to the company. Tata Power also said the discoms hadn’t complied with payment security-related issues. Though the discoms paid the dues yesterday, Tata Power has said the power purchase agreement between them was terminated. “The outstanding payments have been made by Rajasthan only after the termination of the contract. However, the reason for termination is the payment security issues, which are yet to be complied with,” Tata Power said in a statement.

According to the NTPC notice, the government allows it to stop supplying power in case of a default in payment. The company is already in talks with buyers in the northern, as well as other regions to absorb the excess power.

Attempts to contact officials at Rajasthan state discoms didn’t elicit any response.

Last year, state discoms in Rajasthan, like their counterparts in other states, saw a financial crisis, resulting from huge piled-up debt and delays in revising rates. The debt of discoms in the state stood at Rs 35,000 crore last year. However, the discoms raised power rates twice last year, and this is expected to improve their financial position.