Delhi’s power crisis worsened with the Supreme Court allowing NTPC to cut supply to BSES electricity distribution companies (discoms) in case BSES’ firms BSES Rajdhani Power (BRPL) and BSES Yamuna Power (BYPL) are unable to clear Rs 788 crore of dues by the end of the month. In addition, NTPC will present another bill of around Rs 400 crore to BSES in June for electricity supplied in May.
An SC bench comprising justices SS Nijjar and AK Sikri on Tuesday directed the two BSES discoms to pay up “as per the figures, duly signed by both NTPC and BSES firms, submitted to the court... Now that you are agreeing on the figures yourself, you should clear the current dues. All this is (of) your own making. The other company (Tata Power Delhi Distribution or TPDDL) doesn’t have any problem. We are talking about present dues and not past dues... We have to balance the equity...”
Though the current discussion in the Supreme Court is only about NTPC’s dues, several other suppliers who have not been paid — as of March 31, BSES’ dues were R6,412 crore — may also start cutting off supply. Damodar Valley Corporation is in the Supreme Court against BSES and Aravali Power is at the Appellate Tribunal for Electricity.
BSES, for its part, has said it does not have the money to pay as the R10,000-crore loan it has approached Power Finance Corporation and Rural Electrification Corporation for is contingent on the Delhi Electricity Regulatory Commission (DERC) hiking its tariffs so that it can quickly get back R20,700 crore due to it by way of ‘regulatory assets’.
In addition, BSES also runs up a deficit — the difference between its costs and the revenues it gets from customers — each month, which prevents it from paying even the recurring bills of suppliers. In the case of BRPL, in January-March 2014, it had a deficit of R440 crore while the figure was R500 crore for BYPL.
While DERC has put out an eight-year schedule for discharging R8,000 crore of the regulatory assets, the lenders are learnt to have said they need DERC to shorten the period by way of higher electricity tariffs.
When contacted, DERC chairman PD Sudhakar said, “We have clarified our position to PFC/REC... They appeared satisfied, but if they want more discussion, they can come.”
On the issue of whether the Rs 26,197 crore of regulatory assets — including TPDDL’s Rs 5,489 crore — can be discharged faster, Sudhakar said, “The issue is before the Appellate Tribunal for Electricity, it is also before the Supreme Court... There can be no higher authority... We will go by whatever the court tells us.”
Senior officials of the Delhi government said the matter of regulatory assets was between BSES and DERC. They added, though that creating of regulatory assets was not only against the ruling of the ATE, it hurt Delhi’s consumers in the long run — they have to pay an interest cost on the regulatory assets, the officials added.
“BSES discoms have consistently been using all available collections, net of core operating expenses, to pay current dues of power generators and will continue doing so,” a BSES spokesperson said. “BSES discoms are already making payment of over 80% of current dues to power generators based on current tariffs. BSES discoms will once again move DERC to make the current tariffs cost reflective, to facilitate full compliance of the order of the Hon'ble Supreme Court. The under-recoveries of tariffs for BSES discoms have now crossed an unsustainable and alarming level of Rs 21,701 crore.”
Hearings on the regulatory assets issue will resume later in the Supreme Court.
According to a staff paper put out on the DERC website, BRPL has a fresh regulatory asset of Rs 1,623 crore in FY13, BYPL Rs 1,285 crore and the TPDDL Rs 421 crore. Once these are taken into account, BRPL’s regulatory assets at the end of FY14 are Rs 13,454 crore, BYPL’s Rs 8,250 crore and that of TPDDL Rs 5,489 crore. In addition, the annual revenue requirements put forward by BRPL for FY15 are Rs 9,361 crore, Rs 5,527 crore for BYPL and Rs 6,079 for TPDDL.