NTPC serves BSES Rajdhani notice of power supply suspension

NTPC has served notice of power suspension from February 11 to BSES Rajdhani, an electricity distributor in the national capital, due to payment issues.
The state-owned utility said BSES Rajdhani had not maintained a letter of credit of adequate value, which is needed to get supply of power from NTPC stations.
"In spite of our repeated follow-up and meeting with senior officials of BSES Rajdhani, the company has not been able to give any letter of credit for the full value within seven days, which is a breach of PPA (power purchase agreement) provisions," NTPC said in a notice today to BSES Rajdhani.

The Central Electricity Regulatory Commission (CERC) empowers generation companies to regulate power supply in case letters of credit, which are assurances of payment, are not maintained.
In the event of a default in payment or non-enhancement of letter of credit, NTPC can give BSES Rajdhani 90 days to rectify the situation, during which supply of power will remain suspended, the company said.
"CERC (Regulation of Power Supply) Regulations, 2010, also provide for regulation of power supply in case of non-maintenance of the required letter of credit or other agreed payment security mechanism (PSM)," the company said in the notice.

NTPC said that going by past record, BSES Rajdhani has not been able to reinstate letters of credit within seven days, as envisaged in the PPA, NTPC said.

Last month, BSES Rajdhani re-instituted the letter of credit on January 29, against the due date of January 7, NTPC said, adding that currently there is no letter of credit available.
The last letter of credit was encashed yesterday, leaving a shortfall of Rs 27l.61 crore, NTPC said.
Since BSES Rajdhani has not been able to provide the requisite payment security mechanism, notice for regulation of power supply for 90 days starting February 11 has been issued to BSES Rajdhani, NTPC said.
The present allocation of power to BSES Rajdhani from NTPC stations is l,26l MW.
BSES Rajdhani distributes power to over 18.5 lakh customers in south and west Delhi, including Alaknanda, Vasant Kunj, Saket, Nehru Place, Nizamuddin, Sarita Vihar, Hauz Khas, R K Puram, Janakpuri, Punjabi Bagh, Tagore Garden, Vikas Puri, Palam and Dwarka, according to its website.