Delhi power crisis: Arvind Kejriwal govt prepares for takeover of BSES firms

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Delhi govt asked the DERC to be prepared for an immediate suspension of the licences of Anil Ambani-led discoms. Reuters Delhi govt asked the DERC to be prepared for an immediate suspension of the licences of Anil Ambani-led discoms. Reuters
SummaryDelhi govt asks DERC to be prepared for immediate suspension of Anil Ambani-led discoms' licences.

Hardening its stance, the Aam Aadmi Party-led Delhi government on Monday asked the Delhi Electricity Regulatory Commission (DERC) to be prepared for an immediate suspension of the licences of Anil Ambani-led discoms — BSES Yamuna Power and BSES Rajdhani Power — in case the duo indeed impose “extensive blackouts” on their consumers citing financial difficulties. Together, these discoms cater to two-thirds of electricity consumers in the state.

Delhi power secretary Puneet K Goel wrote to DERC chairman PD Sudhakar on Monday: “It is requested that it may definitely be found out from the two discoms in the next two or three days as to whether they are going to stop a substantial part of the supply of power to the consumers of Delhi beyond 10th February, 2014. In case these discoms continue with their stand, the DERC may not have an alternative but to suspend their licences immediately, as a first step, under para 13 of the terms and conditions of their distribution licences.”

The power secretary’s letter, a copy of which is with FE, also says that the functioning of the distribution utilities should be transferred to state government and its officials should be appointed as the administrative officers for the utilities.

A BSES spokesperson, however, denied any knowledge of the matter. “We are not aware of any such development. This matter has not been discussed at the board meeting since the discoms are a 51:49 joint venture with the Delhi government,” he said. When contacted, Sudhakar told FE that he had not received the purported communication. “By the time I had left office, no such letter was received from the government,” he said.

The BSES spokesperson added: “We are deeply committed to the consumers of Delhi, and have served them for over 10 years and reduced power losses to the tune of nearly Rs 35,000 crore, which have accrued as savings to Delhi government.”

According to experts, the Electricity Act 2003 provides for cancellation of licences of existing discoms if they are no longer financially capable of supplying power as per the terms of the agreement or they have violated licence conditions. In that context, regulator can also start the process for selection of new suppliers.

BSES Yamuna Power (BYPL) had defaulted on payment due to NTPC and NHPC for power supplied by them to it during January. Consequently, the central utilities served a 10-day disconnection deadline to the discom that ends on Monday. The Delhi government had requested NTPC to give more time to the defaulting discom but to no avail. Other central utilities like Damodar Valley Corporation and SJVN have also stopped supply of 259 MW electricity to BYPL due to non-payment of dues.

BYPL has told the government that it does not have enough money to clear dues of NTPC and NHPC. Banks are also not lending to because of its revenue gap of over Rs 6,000 crore. Th discom has warned that it will have no option but to resort to 8-10 hours of load-shedding if NTPC, NHPC disconnect power supply to it.

The DERC had created regulatory assets (R) of about Rs 15,000 crore, which has badly affected cash flows of these discoms. Further, it has also hurt discoms’ creditworthiness, making it difficult for them to access bank loans. RAs are revenue due to discoms but where payment has been deferred to avoid tariff shock to consumers.

“Extensive blackouts in the capital city of the country due to financial difficulties of the these two discoms is not acceptable. In the event suspension of licences becomes necessary in the near future, suitable officers will have to be appointed as Administrative Officers of BSES discoms. 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 the consumers and Government of Delhi are not caught napping,” the letter says.

Delhi chief minister Arvind Kejriwal has already issued the necessary instructions to the chief secretary to be ready to appoint administrative officers for these discoms.

Delhi government has also asked DERC to clear “some subsidy amounts that are due to the discoms by February 15.

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