Now, NTPC threatens to cut off power to Rajasthan

Sends notices to three discoms to renew line of credit, failing which it would cut supply in three days

After Tata Power snapped power supply to Rajasthan, state-owned power generator NTPC has taken up payment issues with the three discoms of Rajasthan state.

NTPC sent a regulation notice to the three discoms of the state, asking them to renew the line of credit to them of around Rs 188 crore. If the same is not renewed in the next three days (January 13, 2013), NTPC would cut power supply of as much as 1,258 megawatt to the three discoms-- Jaipur Vidyut Vitaran Nigam, Jodhpur Vidyut Vitaran Nigam and Ajmer Vidyut Vitaran Nigam.

These discoms owe Rs 95 crore to NTPC in dues. The company has raised bills for around Rs 272 crore.

This move by NTPC came after the validity of a line of credit of Rs 121 crore expired on December 31, 2012.

“Since Rajasthan discoms have not extended the validity of the LC in spite of repeated follow ups, notice for regulation of power supply on Rajasthan discoms is hereby given as per provisions of the Central Electricity Regulatory Commission (Regulations of Power Supply),” the regulation notice by NTPC said. 

Last week, Tata Power cut power supply to Rajasthan state discoms after as much as Rs 96.2 crore outstanding dues were not paid. Also, Tata Power said that the discoms did not comply with it on payment security related issues.

Yesterday, the discoms paid up their outstanding dues to Tata Power. The company, however, says that the power purchase agreement between both of them stands terminated.

NTPC says that the government allows them to shut off power supply in case of default in payment. NTPC is already in talks with other buyers in Northern and other regions to absorb the power that would be in excess. This newspaper had tried to contact Rajasthan state discom officials, but the efforts are yet to elicit any response.

Many state power distribution companies slipped into financial trouble last year. Rajasthan comes under the section of those which are in much weaker financial position. Last year, they restricted debt of Rs 35,000 crore. The state also raised its power tariffs twice last year.