Saturday, Oct 25, 2014

NTPC threatens to cut supply to BSES firms from February 11

NTPC said it would regulate 1,261 MW of supplies to BRPL and 811 MW for BYPL. (Reuters) NTPC said it would regulate 1,261 MW of supplies to BRPL and 811 MW for BYPL. (Reuters)
ENS Economic Bureau | New Delhi | Posted: February 2, 2014 12:15 am | Updated: February 2, 2014 3:46 am

A day after the power regulator announced an increase in electricity tariffs in Delhi, state-owned power generator NTPC Ltd issued notices to ADAG group firms BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL), threatening to cumulatively regulate over 2,000 MW of supplies to the two utilities starting February 11.

A disruption by NTPC, one of the key suppliers of power to the capital, could impact over 32 lakh customers spread across the southern, eastern, central and western parts of Delhi.

NTPC said the two distribution companies (discoms) had failed to re-instate the payment security mechanism (by opening a letter of credit, or LC, in favour of the generation firm) within the timeframe stipulated in the power purchase agreement (PPA).

Also on Saturday, Delhi Chief Minister Arvind Kejriwal said that the truth about the discoms’ finances would come out in the CAG audit ordered by his government.

“The power companies are saying that they do not have money, but where has their money gone? The CAG is trying to find their money and the truth will come out in the CAG’s report. After this, we will know whether they are really facing a financial crisis or not,” Kejriwal said.

NTPC’s move comes after it was forced to encash the LC opened previously by the discoms on January 31, after they failed to clear their dues to the generator. “So, the shortfall in LC with effect from February 1 is Rs 271.61 crore (in the case of BRPL),” NTPC said in its notice sent to the two firms. For BYPL, the LC amount is Rs 168.29 crore and there are pending payments of Rs 96.07 crore for January 2014.

NTPC said it would regulate 1,261 MW of supplies to BRPL and 811 MW for BYPL. As per the PPA, maintenance of the LC for an amount covering a designated period of supplies and timely replenishment of LC on negotiation is a prerequisite for availing power from NTPC stations.

The discoms were supposed to clear the payments by Friday. Earlier, BYPL had informed the government of the likelihood of loadshedding of up to 8-10 hours in east and central Delhi from next week. The utility claimed it did not have funds to pay NTPC or state-owned hydro power major NHPC for power supplied in January 2014.

NTPC has turned down a request from the Delhi government, asking it to extend the payment schedule. NTPC had been forced to send similar notices twice earlier – once each in 2011 and 2012. In February 2013, it issued a warning note to the two BSES companies.
On Friday, the state electricity regulator allowed all three discoms to raise tariffs by 6-8 per cent. The order by the Delhi Electricity Regulatory Commission capped a day when Delhi’s power crisis swung from the chief minister’s office to that of NTPC, and back.
Chief Minister Arvind Kejriwal on Friday accused the discoms of trying to “blackmail” his government.

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