BSES subsidiaries in Delhi clear electricity dues following court order

MUMBAI: The spectre of blackouts in Delhi has receded as BSES subsidiaries that distribute electricity in the city are paying up their dues to suppliers, who had threatened cuts because of pending bills.
BSES firms had borrowed Rs 1,000 crore to settle the dues. BSES Rajdhani has already cleared its dues as on June 30.

Meanwhile, BSES Yamuna is paying Rs 161 crore to Indraprastha Power Generation, Delhi Transco, Pragati Power and the Bawana Power Plant, industry sources said. The distribution companies were unable to pay for the power purchased, leading to a tussle with generation firms.

The Supreme Court ordered that the dues should be cleared by July 15. BSES Yamuna had outstanding dues of Rs 257 crore but this has been reduced to Rs 161 crore after accounting for the subsidy of Rs 96 crore on account of the Delhi government’s move, when Arvind Kejriwal was the chief minister, to subsidise household consuming up to 400 units per month. Distribution firms say the tariffs do not cover their costs.

"This situation has arisen entirely because of substantial increases in power purchase costs over these last few years coupled with the complete absence of a cost reflective tariff regime at the distribution level. Since privatisation, the cost at which the Delhi discoms purchase power has increased by around 300 per cent, while on the other hand, the retail tariff has increased by around 75 per cent," said a source close to the company.

"As per a staff paper dated March 2014 of the Delhi electricity regulatory commission, accumulated revenue gap for FY 2013-14 for the Delhi discoms is overRs 27,000 crore for BSES Rajdhani it isRs 13,452 crore, for BSES Yamuna itsRs 8,249 crore, and for Tata it is Rs 5,488 crore. This is the money that is owed to the Delhi discoms by the regulator," the source added.

The distribution firms had paid dues of Rs 696 crore to NTPC in May. BSES Yamuna has 1.35 million customers in central and east Delhi, while BSES Rajdhani distributes power to more than 1.85 million customers in areas of south and west Delhi.