Tuesday, Oct 21, 2014

6-8% power rate hike: Discoms fire in war with Delhi govt

 Aam Aadmi Party had promised that it will slash the rates of power for Delhiites. (AP) Aam Aadmi Party had promised that it will slash the rates of power for Delhiites. (AP)
ENS Economic Bureau | New Delhi | Posted: February 1, 2014 12:12 am | Updated: February 1, 2014 4:15 am

The stand-off  between the Delhi government and private power distribution companies escalated Friday with the state electricity regulator allowing tariffs to be raised by 6 to 8 per cent.

The increase puts Arvind Kejriwal’s AAP government in a tough spot as the party campaigned for a substantial cut in tariffs and has also asked the Comptroller and Auditor General to audit the three discoms in the capital, suspecting inflated bills.
The Delhi Electricity Regulatory Commission order Friday evening capped a day when the power crisis in Delhi swung from the chief minister’s office to NTPC and back.

Through the day, BSES Yamuna Power (BYPL) and PSU power producer NTPC were engaged in a tussle over BYPL’s unpaid dues of Rs 179.68 crore.  The tussle came after chief minister Kejriwal accused the two ADAG group discoms Friday of trying to “blackmail” his government by threatening power cuts of up to 10 hours a day.

NTPC has threatened to switch off about 500 MW of supply to east and central Delhi where BYPL provides power since the latter has not paid its dues. NTPC has informed Kejriwal’s government that it will snap supply to BYPL if the company does not pay up by Friday, the last day of a grace period.

While the company has not specified the time limit, it has to issue a notice with a deadline for compliance before it can switch off supplies under the power purchase agreement. The warning letter from NTPC also points out that BYPL has been repeatedly slipping up in meeting its dues for power purchases. “It may be pointed out that for quite some time both the BSES discoms are significantly delaying the recoupment of the letter of credit beyond the due date”, it said.

Under the letter of credit arrangement, the companies are supposed to clear their bills within 60 days. BYPL has asked for it to be extended to 90 days. Following the threat issued Thursday, NTPC and BYPL officials were engaged in a day-long discussions to find a solution to prevent the black-out. A similar stand-off has taken place three times in the last four years.

BYPL has claimed the slippage is a result of several factors, primarily because the state government has encouraged customers not to pay bills, which Kejriwal has claimed were inflated.  BYPL sources said this has compounded its financial problems. The other discom, NDPL run by the Tata Power, has paid its dues to NTPC.

BYPL has also asked the state government to give it a bail-out package to pay dues to NTPC. In 2013, then chief minister Sheila Dikshit had given such support.  The letter from BYPL addressed to principal secretary Puneet Goel notes that the company is facing a difficult situation in realising its dues and has slipped up in payments to the power generation companies including NTPC and NHPC.  This is because banks have stopped offering fresh credit to it owing to its accumulated revenue arrears of Rs 6,200 crore. BYPL supplies electricity to nearly 14 lakh households.

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