Delhi govt asks DERC to revoke license of BSES if power stopped

Written by PTI | New Delhi | Updated: Feb 4 2014, 04:02am hrs
BSES, discomsBSES discoms supply power in nearly 70 per cent areas in the city. Reuters
Hardening its stand on the issue, Delhi government today recommended to power regulator DERC to revoke the license of Reliance Infra-backed power distribution companies if they they fail to pay dues to NTPC and resort to long outages in large parts of the city citing fund crunch.

In a letter, the government conveyed to Delhi Electricity Regulatory Commission (DERC) that extensive blackouts due to financial difficulties of BSES discoms will not be acceptable.

"The stand of discoms that due to their financial difficulties, they will be unable to supply power to consumers of Delhi for long hours in a day calls for revocation of their licences by DERC under section 19(d) of the Electricity Act, 2003," the government told DERC.

State-run power generator NTPC had on Saturday served notices of power supply suspension to the two Anil Ambani-owned distribution companies and said electricity supplies will be snapped if they do not clear their dues by February 10. BSES discoms supply power in nearly 70 per cent areas in the city.

Both the discoms have already said they were reeling under severe fund crunch due to which payments to NTPC could not be made.

Terming it as a "most serious matter", the government requested DERC to find out from the two discoms in the next two or three days as to whether they are going to stop power supply to consumers of Delhi beyond February 10.

"In case, these discoms continue with their stand, DERC may not have an alternative but to suspend their licenses immediately, as a first step, under para 13 of the terms and conditions of their distribution licences," the government said.

Indicating that government may take over power distribution, it said that in the event suspension of licences, "suitable officers" will have to be appointed as administrative officers of BSES discoms.

The government also requested DERC to identify the officers who could be appointed as administrative officers immediately if the situation demands so.

"It is requested that officers who could be appointed as administrative officers of discoms may be immediately identified in consultation with the Chief Secretary so that if need be, immediate action is possible and consumers and Government of Delhi are not caught napping," the letter said.

Sources said Delhi government has already requested lending institutions Power Finance Corporation and Rural Electrification Corporation to provide financial help to the two discoms.

"The Chief Minister has already issued the necessary instructions to the Chief Secretary. DERC may immediately take these steps or work out any other alternative suitable mechanism to address the situation," the letter said.

DERC chairman P D Sudhakar said the issue will be discussed threadbare tomorrow.

BSES discoms issued a statement, saying they were not aware of the government's recommendation to suspend licenses.

"We are not aware of any such developments. We are deeply committed to consumers of Delhi and have served them for over 10 years and reduced power losses to the tune of nearly Rs 35,000 crores which have accrued as savings to Delhi government," they said.

The power tariff in the city was hiked by up to eight per cent on Friday by DERC to help discoms improve their finances.

Last week, Chief Minister Arvind Kejriwal had accused BSES discoms of trying to "blackmail" the government by threatening power cuts upto 10 hours a day, and warned them of strict action including possible cancellation of licenses.

The Chief Minister also said Tatas and Ambanis, who run three electricity distribution firms in Delhi, were not the only companies in the country and government was willing to bring new players.

Officials said some subsidy amount was due to the discoms from the government and it will be cleared by February 15. They, however, said the amount will be adjusted against dues the two discoms owe to Delhi government-run power transmission companies.

Last week, BSES Yamuna Power Ltd had informed Delhi government that areas under its jurisdiction may face eight to 10 hours of power cuts as the company was facing serious fund crunch to buy electricity.

BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd, which supply power in 70 per cent areas in Delhi, owe around Rs 4,000 crore to Delhi government-run power generation and transmission companies.

Both BRPL and BYPL have been demanding significant hike in tariff, citing rise in power purchase cost.