Supreme Court Reprimands NTPC Over BSES Power Cut

The Supreme Court has asked the National Thermal Power Corporation (NTPC) not to cut the power supply of the BSES, a Reliance ADAG group owned distribution company over the non payment of dues. The court has also asked the distribution company BSES to clear all the dues of the generating and transmission companies, which are pending since January 2014.

During the month of February 2014 NTPC has threatened BSES to cut power supply if they did not pay the bill in time. In exchange of this the Delhi Discoms threatened to power cut in Delhi as they were not having sufficient amount because of low tariff rate, to pay the dues to NTPC, their biggest power supplier.  For this the court has NTPC not to stop the power supply and also asked the BSES Rajdhani Power (BRPL) and BSES Yamuna Power (BYPL) to pay the due amount of Rs 700 crore.

BSES has total dues of Rs 19,000 crore to recover from the state electricity boards while the company has to pay Rs 6,000 crore to the generating and transmission companies. On payment of the dues the court has asked the Delhi Electricity Regulatory Commission (DERC) to come up with a road map of payment of dues and how to resolve the matter of revenue shortfall within 30 days.

BYPL and BRPL provides around 70% of the total power in Delhi. According to the BSES tariff data Delhi power tariff is lower than other metro cities and its neighbour towns. The cost of power to BSES Rajdhani has moved up from Rs 1.42 per unit in 2003 to Rs 5.71 per unit in 2013. Now the cost of purchase of power for BSES itself is Rs 5.71 and the minimum billing amount was Rs 3.90 before the power was subsidized. And after the subsidy the current rate is Rs 1.95. From this we can say that the company is of course making losses. So we can say that to bring the companies on profit the hike in tariff is required.