‘Generating companies finding it hard to maintain supply without payment’

The Delhi Government’s Power Department has cautioned power distribution companies BRPL and BYPL to pay up their outstanding dues to the generating companies or face punitive action.

The two companies together owe generation companies in Delhi Rs.1,900 crore.

“The companies were earlier asked to clear their dues and they sought time. But now the pending sum has reached Rs. 1,900 crore and the generating companies are finding it hard to keep supplying power without getting paid,” said an official of the Power Department.

On what action can be taken against the companies for defaulting, the official said: “The generating companies do not want to cut supply, because though that is the most appropriate punishment, it will affect the consumers. The generating companies and the government do not want to inconvenience the consumers; but the discoms will be dealt with severely.”

Asked whether the government can approach the concerned authorities for the revocation of the discoms’ licenses, the official, without elaborating, said; “it can be a possibility.”

For their part the discoms claimed that they are paying whatever possible to the generating companies.

“We are waiting for the release of Rs. 250 crore from States through the release of unscheduled interchange (UI) account. The Municipal Corporation of Delhi owes us Rs. 70 crore in dues, so to be able to pay off generating companies we need to first receive the outstanding amounts that are owed to us. We have pledged in writing the amounts that we owe the companies in Delhi, and since we are a retailing company, if the cash flow is affected, it disturbs the entire chain of inflow and outflow of payments,” said an official of BYPL.

BRPL that owes the Delhi generating companies, about Rs. 900 crore said it has been making part payment to the Delhi generating companies, because it has to first pay off the National Thermal Power Corporation (NTPC).

“In the beginning of the year there was no money to pay. After the tariff order in July we were able to make some current payments to generation companies outside Delhi. We are also looking for securing finance, but that is largely hinged on bank sureties. And banks need assurance that the loans will be repaid. The DERC cannot commit tariff orders that can help the banks feel secure and that is an impasse we are trying to break,” said an official of BRPL.

In June Dmodar Valley Corporation (DVC) had threatened to snap power supply to the two power distribution companies unless they paid their dues of Rs. 331 crore. The DVC had then said that the companies had failed to pay up despite repeated requests.

A similar threat was issued by the National Thermal Power Corporation in December 2011, after the discoms claimed they were unable to pay their dues. Following NTPC’s complaint, the Delhi Electricity Regulatory Commission had issued a notice to the two discoms over non-payment of dues and asked why their license should not be suspended. The issue was resolved after the Delhi Government stepped in with offering to infuse fresh equity that helped the discoms to secure loans to pay their outstanding money.

More In: Delhi