Kejriwal threatens to cancel licences

DERC raises rates up to 8%; NTPC might not supply power to 'defaulter' discoms

A day after Delhi’s private power distribution company BSES Yamuna Power Limited (BYPL) threatened to impose  power cuts up to 10 hours in the national capital, Chief Minister Arvind Kejriwal warned the discoms of stern action, including cancellation of licences, if they went ahead with the plan.

However, the city’s electricity regulator, DERC, gave a breather to the three discoms — Reliance Infrastructure-owned BYPL and BSES Rajdhani Power Limited (BRPL) and Tata Power Delhi Distribution Ltd (TPDDL), allowing them to collect up to eight per cent extra through more fuel charges.

Kejriwal’s threat failed to make a mark, as licence revocation is the exclusive domain of the regulator under current law. However, the discoms’ woes worsened after power generator NTPC on Friday rejected the government’s request for not cutting electricity supply to BYPL for defaulting on payments. BYPL, one of the three private discoms in the city, had cited acute financial crisis in support of its call for load-shedding beginning Saturday. The firm had sought government’s intervention in the row.

Kejriwal accused the discoms of blackmailing the government. “The government will not keep quiet. We will not hesitate in cancelling their licences. We will bring in other companies. They are not the only companies in the country,” he said, adding the discoms were trying to create panic and evade the Comptroller and Auditor General of India (CAG)’s audit.

BYPL and BRPL supply power to 75 per cent of the city’s 3.4 million consumers. Tata Power subsidiary TPDDL caters to the rest of the population. The discoms said their finances had worsened, leading to an accumulated revenue gap of Rs 20,000 crore owing to inadequate rates. Kejriwal, however, said the firms had manipulated their accounts.

Kejriwal had, earlier this month, ordered the CAG audit, saying it would expose financial irregularities. The discoms are contesting the order in the delhi high court. Kejriwal also announced a 50 per cent rate cut through a subsidy. However, that benefit would be partially offset by the power purchase adjustment charge (PPAC) imposed by the regulator. Power purchase cost accounts for 80 per cent of the discoms’ total cost of supply. DERC approved levying a PPAC of six per cent for BRPL consumers, seven per cent for TPDDL consumers and eight per cent for BYPL. In the wake of the rate rise, the discoms might not go for power cuts immediately. The increased power rates will be applicable from February 1 to April 30.

BYPL had, earlier this week, told the government it lacked financial resources to pay power generation and transmission companies, and banks had stopped credit flow owing to accumulation of a revenue gap (regulatory assets) of an estimated Rs 6,229 crore. Also, there were no funds to pay aggregate dues of Rs 204 crore to NTPC and NHPC for power procured in January.

Non-payment of arrears by BYPL to NTPC by the evening on Friday would lead to depletion of 500 Mw supply beginning Saturday. A senior NTPC executive confirmed the generator would not continue to supply if payments were not received. “We have told them (discoms) payments must come. We are insisting on payments,” the executive said, adding TPDDL had already cleared the dues.