Delhi power crisis: Reliance Infra-owned discoms get temporary relief

Written by fe Bureau | New Delhi | Updated: Feb 6 2014, 13:49pm hrs
Delhi power crisisThe prospect of 10-hour power cuts in Delhi from February 10 continues to look real.
In a temporary relief to Delhis two Reliance Infra-owned discoms facing imminent suspension of their licences by the regulator under a state government directive, the Appellate Tribunal for Electricity (Aptel) on Wednesday asked the Delhi Electricity Regulatory Commission (DERC) to desist from passing any final orders on the matter without its leave during the pendency of a related case before it.

The Aptel order has posed a hurdle for the Arvind Kejriwal-led government which had on Monday sent a missive to the regulator asking it to be battle-ready for a possible suspension of the licences of the two discoms BSES Yamuna Power and BSES Rajdhani Power in case they, claiming financial difficulties, resort to long outages in large parts of the city.

State-run power generator NTPC had, on February 1, issued notices to the two Anil Ambani-owned distribution companies to cough up dues owed by them or face suspension of power supply.

For the capitals 2.5 million consumers the two firms supply power to three-fourths of the citys 3.4 million consumers tribunal order has only heightened the uncertainty. The prospect of 10-hour power cuts from February 10 continues to look real. With the state government firm on not allowing any tariff hike and in the absence of third-party protection audit with the state (under which many other states pay the suppliers of power under state allocation) the DERC has few options before it.

Reached for comments, DERC chairman PD Sudhakar told FE that the regulator was examining the matter and would hear all parties before taking a decision on the future course of action.

Wednesday's tribunal order came while it was hearing a plea from BSES Yamuna and BSES Rajdhani, seeking time-bound faster liquidation of their mounting regulatory assets (deferred revenues) amounting to Rs 15,000 crore to recover past dues.

The Aptel has restrained DERC from passing any final order without taking a prior leave of the tribunal but has allowed it to proceed ahead with the hearing of the matter. For now, both discoms have been directed to appear before the Delhi power regulator on February 6, in respect of the February 3 letter sent by the Delhi government seeking licence suspension.

Aptel said in its order: Having regard to the urgency of the matter, we deem it appropriate to direct the appellants to appear before the Delhi Commission on 6.2.2014 and make their submissions with regard to the letter of Government and Delhi Commission may continue to proceed with the matter by hearing the parties concerned, but the Commission is directed not to pass the final order in the above proceedings without leave of the Tribunal during the pendency of these interim applications.

Wednesday's development could heighten the tension between the discoms and the Delhi government, who are currently locked in a fierce court and public battle with chief minister Arvind Kejriwal accusing the discoms of manipulating accounts with the intention to hike tariffs. The CAG audit, ordered by the CM on January 7 and against which the discoms had moved unsuccessfully moved the Delhi High Court, is also currently underway.

The Delhi government has said that it was ready to take over power distribution in the city to control the ugly situation. The BSES discoms, on the other hand, have slammed the government for recommending to DERC to revoke their licences, terming the move as arbitrary and illegal.

The appellate tribunal has jurisdiction to take up power-related disputes across the country as per provisions of Electricity Act, 2003.

NTPC chairman Arup Roy Choudhury on Tuesday made it clear that the company will be forced to regulate around 2,000 MW supplied to BSES Yamuna and BSES Rajdhani, if pending dues are not cleared. NTPC has already served a notice on the two firms for defaulting on their payment security mechanism.

Under Section 19 (1) of the Electricity Act 2003, licence suspension and revocation is the exclusive domain of the regulator. As per the law, DERC can cancel the licence in public interest, if it is convinced about the adverse financial position of a licensee. However, DERC will have to issue a three-month show cause notice to the discoms. According to the terms of the distribution licence, within a year of suspension, DERC can either revoke the suspension and restore the licence or revoke the licence.

On February 3, the Delhi government also moved the Delhi High Court seeking a direction to the three discoms in Delhi (which includes Tata Power) to stop them from adjusting the increase in their Power Purchase Cost Adjustment Charges (PPAC) to the consumers power bill. The DERC, by its order on January 31, had permitted an increase of PPAC by 6% to BSES Rajdhani, 8% to BSES Yamuna and 7% to Tata Power.

Meanwhile, Kejriwal on Wednesday wrote to Lt Governor Najeeb Jung: I am bringing this most serious matter to your notice as the government itself may have to step in at some stage, to control the ugly situation which may be created by the three private discoms.