Under pressure from India’s largest power producer NTPC to clear dues, Reliance Infrastructure subsidiaries BSES Rajdhani and BSES Yamuna are expected to pay Rs 80 crore by Monday.
NTPC has threatened to pull the plug on BSES Delhi from September 7, stating the two distribution companies owe it Rs 900 crore by the month-end. Though BSES claimed its companies had paid Rs 40 crore and the balance would be cleared by Monday, NTPC executives said they had received Rs 20 crore till late Saturday evening.
Both sides were engaged in intense discussions today to prevent breakdown of power supply in the national capital. The two BSES companies supply electricity to two-thirds of Delhi, comprising over 2.83 million customers.
The BSES entities have disputed NTPC’s claim of special dues of Rs 425 crore. A senior company executive, who did not want to be identified, told Business Standard, “BSES Rajdhani and BSES Yamuna strongly feel NTPC needs to get the approval of the Central Electricity Regulatory Commission (CERC) for the recovery of special dues of Rs 425 crore. We are seeking the power regulator’s intervention. As for the pending Rs 425 crore for power supplied by NTPC in August, it is due only next month. We are surprised by this claim.” The official argued that NTPC provided credit of just a month to BSES Rajdhani and Yamuna, though it gave a two-month credit to state utilities.
When contacted, a senior NTPC executive said: “BSES has paid only Rs 20 crore to NTPC out of the total dues.” He said power for about Rs 425 crore had already been supplied to the BSES companies in August and it would be due on September 6.
The government-owned company disputed the claims of violation of CERC norms. “The company’s billing is done in accordance with the CERC order and based on the Regional Energy Account issued by the Regional Power Committee. NTPC is subject to three levels of audits,” the company said in an emailed response.
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All other discoms in Delhi — NDPL, NDMC and MES — had been paying their dues timely, NTPC said. “Even states like Jammu & Kashmir have been making timely payments after availing the due rebate. State-owned utilities’ dues are backed by TPA, wherein outstanding payment can be recovered from the state’s account in the Reserve Bank of India, which is not the case with the BSES.”
Citing the Bihar government’s case, it said the state had agreed for monthly payment of Rs 180 crore to NTPC directly through the RBI on account of purchase of power by the state electricity board under resource gap out of the average billing of Rs 225 crore.
BSES executives said they would clear the current dues of Rs 80 crore by Monday and hoped the power supply from NTPC would remain uninterrupted. They said the priority was to reinstate the letter of credit (LC). NTPC has already encashed LCs of around Rs 344 crore.
A BSES spokesperson said: “BSES Delhi is in discussion with NTPC and bankers for resolution of the issue. BSES stands committed to its 2.8 million consumers and will make all efforts to ensure no inconvenience is caused to its customers.”
Part of the problem for the Delhi distribution companies lies in the high cost of power procurement. BSES Rajdhani and Yamuna have argued with the Delhi Electricity Regulatory Commission that the power cost has increased by 196 per cent, aggregate transmission and commercial loss reduced by 46 per cent and the distribution cost cut by 32 per cent. Efficiency of distribution companies was unable to compensate for the increase in power purchase cost. According to BSES Rajdhani and Yamuna, they were losing Rs 2 for a unit supplied, while the loss for each was of the order of Rs 9 crore due to delays in tariff hike by the Delhi power regulator.
BSES Rajdhani and Yamuna, in their presentation to the Delhi power regulator in May, said the loss on account of inadequate tariff was financed via debt over Rs 9,000 crore. They were going through an unprecedented liquidity crunch, as their credit ratings were under tremendous pressure. They had appealed the Delhi power regulator to define suitable mechanism to liquidate regulatory assets in time-bound manner and restore financial viability.