The petitions come in the wake of NTPC having served notices to the two discoms last week, threatening to cumulatively regulate over 2,000 MW of supplies to them starting February 11, if the utilities failed to clear their dues immediately. NTPC said that the BSES utilities have been constantly defaulting in their payment security mechanism and this time there are also outstanding dues.
On Monday, the Delhi Government had asked DERC to ensure that electricity supply is not interrupted in the national Capital and also asked the regulator to be ready to suspend the discoms’ licence if they fail to provide electricity to consumers. The DERC subsequently served notices to the discoms but an order by the appellate electricity tribunal on Wednesday asking the regulator to refrain from passing a final order in the matter without its consent during the pendency of a related matter, giving a temporary relief to the discoms.
A disruption by NTPC, one of the key suppliers of power to the capital, could impact over 25 lakh customers spread across the southern, eastern, central and western parts of Delhi. The discoms had earlier said they would have resort to large-scale load shedding if the power generator doesn't extend the credit facility.
A bench headed by Chief Justice P Sathasivam posted the matter for hearing on Friday after the utilities sought urgent hearing. Besides, NTPC and the Power ministry, the two discoms have made the Delhi government, Power grid Corporation, Delhi Electricity Regulatory commission (DERC), Delhi Power Co Ltd, National Hydro Power Corporation and Damodar Valley Corporation as parties in their petitions.
Stating that the petitions are sequel to the pending proceedings before the Supreme Court, Counsel Sanjiv Sen argued that the petitions should be heard along with the other matter where BSES discoms have claimed that DERC had illegally retained their Rs 15,000 crore regulatory assets.
While the utilities claimed that they do not have funds to pay NTPC or other power producers for power supplied in January 2014, they want protection of the “investments made by them and the assured return from the licensed business.”
BRPL pointed out that as against an admitted dues of Rs 5,206 crore, which has been deferred, their outstanding dues to its suppliers stand at Rs 1,071 crore. Asking to restrain NTPC from taking any coercive steps till the apex court determined the appropriate mechanism for adjusting its dues against the amounts which DERC owes them, the utilities have sought a direction to DERC to give effect to the deferred cost created as regulatory asset in accordance with the Tariff Policy.
BRPL said that DERC's impugned actions have unlawfully deprived it of its entitlements to recover legitimate dues of around Rs 5,206 crore (regulatory asset) along with assured return on equity accumulated over the last several years.
According to the BSES discoms, the unreasonable, arbitrary and unlawful treatment meted out by the Commission and the Delhi government can be gauged from the fact that the DERC in its statutory advice of December 15, 2010 and February 1, 2013 had admitted that BRPL's tariff causes a loss of over Re one per unit since tariff determined is not cost reflective, causing discoms to resort to extensive borrowing. In fact, the Commission had advised the Delhi government to take various ameliorative measures set out in statutory advice of February last year, the discoms added.
DERC in its statutory advice had recommend to the state government to support the distribution utilities through various Central and state government schemes, the petitions stated, adding that the discoms had even requested the Delhi government to release and adjust Rs 105.56 crore which the latter owed to BRPL towards outstanding dues to IPGCL and PPCL.
“Instead of either of them addressing the issues at hand, the DERC initiated proceedings on Tuesday for suspension of the licence of BRPL at the behest of the Delhi government,” the petition said.
The discoms said that it had in October 2012 clarified to the Delhi government that 8% surcharge allowed to it was not enough to meet the carrying cost (interest) of the regulatory asset.
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.
Delhi Chief Minister Arvind Kejriwal had ordered the CAG audit into the discoms’ accounts and has accused them of trying to “blackmail” his government.