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Discoms hit back, call Delhi govt's actions illegal

Last updated on: February 04, 2014 21:19 IST

Reliance Infra-backed BSES discoms on Tuesday criticised the Delhi government for recommending to power regulator Delhi Electricity Regulatory Commission 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.

Chief Minister Arvind Kejriwal has conveyed to Lt Governor Najeeb Jung that if private discoms express inability to supply power due to financial difficulties, then there may not be any option with power regulator DERC but to suspend or revoke their licenses and take over the operation.

In a letter to Jung, Kejriwal informed his government's recommendation to Delhi Electricity Regulatory Commission to revoke licenses of two BSES discoms if they fail to ensure uninterrupted power supply.

"I am bringing this most serious matter to your notice as the government itself may have to step in at some stage, to control the ugly situation which may be created by the three private discoms," he said, indicating government's readiness to take control of power distribution in the city.

Kejriwal told Jung that the extensive blackouts due to financial difficulties of discoms will not be acceptable at all.

Delhi government had on Monday recommended to DERC to revoke the license of BSES discoms if they fail to pay dues to NTPC and resort to long outages in large parts of the city.

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 crore 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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