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Home News Power Sector News APTEL suggests financial restructuring of BSES discoms

APTEL suggests financial restructuring of BSES discoms

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DelhiThe Appellate Tribunal for Electricity (APTEL) on 11-03-2014 said financial restructuring of BSES discoms would help in making their business sustainable with minimum burden on the consumers. Besides, it has asked the Delhi Electricity Regulatory Commission (DERC) to decide on roadmap for liquidating the discoms' regulatory assets. The commission last week proposed a road map for payment of Rs.8,000 crore and interest to the three discoms run by Reliance and Tatas.
The APTEL's latest move provides succour for the two discoms—BSES Rajdhani and BSES Yamuna—which has been seeking liquidation of accumulated arrears.

The directive came on petition filed by the two discoms which supply power in nearly 70% areas in the city. In a separate order, the tribunal recalled last month's directive that restrained DERC from taking any "coercive action" against BSES discoms like suspension of their licenses without its nod.
Meanwhile, the tribunal has said that financial restructuring would be helpful in sustaining the business of the discoms. "We feel that in view of large regulatory assets which have been accumulated over the years, financial restructuring of the distribution licensees will be very helpful in sustaining the business of the licensees with minimum burden on the consumers," the tribunal said in an order on Tuesday.
According to the tribunal, DERC shall again take up the matter with Delhi government for early decision on the financial restructuring of the discoms to "minimise the burden on the consumers on account of increase in retail supply tariff due to liquidation of the regulatory assets".
The tribunal said that DERC has to decide a roadmap for liquidation of the accepted regulatory assets keeping in view the interests of the consumers as well as that of discoms.
In the absence of any financial restructuring by the state government, the tribunal said the consumers could not be left at the mercy of the generating companies and the distribution licensees to manage the power supply in the national capital at their own will.
In that case, DERC may follow its own roadmap to remedy discoms' finances, it added.
As per the tribunal, the problem is to be examined in terms of meeting the current expenses and avoiding further accumulation of the regulatory assets as well as "liquidation of the approved regulatory assets as at end of FY 2011-12." "We welcome the order of APTEL directing DERC to take an early decision for liquidation of the huge accumulated arrears owed to the Delhi discoms," BSES spokesperson said in a statement.
"APTEL has clearly directed DERC to ensure sustainability of the business of the discoms. DERC has already proposed last week a roadmap for payment of over Rs.8,000 crore and interest thereon owed to the discoms," he added.

Source - Mint


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