Don't distort tariff, pay aid directly to poor: NTPC to states

Issuing bonds and writing off debt will not help power distribution firms, and states should use technology to provide direct subsidy to weaker sections without affecting tariff, NTPC Chairman Arup Roy Choudhury said today.
"All these bonds, (loan) write off, all the crutches that government provide, does not help. The states have to get their act together. They have to realise that energy has a cost," Choudhury told reporter here.
Choudhury, who is retiring by month end, said in so many words, that states should use Direct Benefit Transfer (DBT) for providing financial aid or subsidy to poor using power.

Under the DBT, the government transfers the subsidy on cooking gas or cereals or other benefits like pension or scholarships, directly into beneficiary's bank account.
He suggested," we have economically weaker people who need (financial) support. Today, technology is providing ways to give then support directly. Why do you want to disturb the tariff."
In the present scenario, the power distribution companies' cumulative debt is over rupees three lakh crore and Centre has given clear indication that it will not act like a bailout bank for them.

"They (states) have to distribute and collect money. They have to look at the reasons why cost of power is increasing. They have to see how they are going to disburse the doles they want to. You cannot do that by hitting the discoms' financials, " he said.

About the renewal of tripartite payment agreement, he said,"We have asked the government what they want to do. Either way, we have no issues. If we are out of it, we are out of power purchase agreements (PPA)... Then we are not bound by the PPAs with the state and so we can sell(power) to anybody."
The tripartite agreement among NTPC, states and Centre provides security regarding payment of dues by states to NTPC. In the event of non-payment of dues , the money is deducted from the central allocations to them and paid to NTPC.
"Our average cost of energy is less than Rs 3 (per unit). There is no state which will not line up to buy power at Rs 3 per unit. It is a win win situation for us. I look at it very positively. If the agreement is extended by the government then it is for the benefit of the government and if it is not, then we are free of regulation and free to sell power," Choudhury said.