Delhi Government's Move Illegal: Discoms

Reliance Infra-backed BSES discoms Tuesday criticised Delhi Government for recommending to power regulator DERC to revoke their licenses, saying the proposal was \"arbitrary\" and \"illegal\" and will be a huge setback to power sector reforms.

Published: 05th February 2014 12:25 AM  |   Last Updated: 05th February 2014 12:26 AM   |  A+A-


Reliance Infra-backed BSES discoms Tuesday criticised Delhi Government for recommending to power regulator DERC to revoke their licenses, saying the proposal was "arbitrary" and "illegal" and will be a huge setback to power sector reforms.

The two discoms, BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd, said they were "deeply concerned" over the move and "extremely surprised" that such a measure was not raised in the board meeting of the discoms last week. Delhi government has 49 per cent stake in each of the discoms.

The discoms said it expected the regulator to proceed independently and in accordance with laws in dealing with the issue.

Delhi government yesterday had recommended to Delhi Electricity Regulatory Commission to revoke the license of BSES discoms if they they fail to pay dues to NTPC and resort to long outages in large parts of the city.

In a letter, the government conveyed to DERC that extensive blackouts due to financial difficulties of BSES discoms will not be acceptable.

"As legally advised, the proposed cancellation of licenses in this situation is arbitrary and illegal, and will only serve to demotivate thousands of our employees who have timelessly worked to transform the power supply situation in Delhi," the BSES discoms said in a statement.

State-run power generator NTPC had on Saturday served notices of power supply suspension to BSES discoms and said electricity supplies will be snapped if they do not clear their dues by February 10.

BSES discoms, which supply power in nearly 70 per cent areas in the city, had informed that they did not have money to buy power and the city may reel under long outages if funds are not provided to them.

Critical of Delhi government, the discoms said it refused for the past 60 days to appoint its nominees to the committee directed to be formed by DERC to examine the precarious cash flow situation and take remedial measures.

"Delhi government's proposed step is a huge setback to power sector reforms, with grave repercussions for the country's future economic growth. DERC's failure to provide appropriate tariffs to cover increase in power purchase costs has led to under-recoveries of over Rs 15,000 crores from consumers," the discoms said.

The BSES discoms said the current payment crisis was result of DERC refusing to allow recovery of their past arrears.

In its letter to DERC, the government had termed the issue as "most serious matter" and requested the regulator 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.

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.



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