Delhi government has officially told Delhi Electricity Regulatory Commission (DERC) that it is unhappy with the performance of Reliance Infra-backed discoms BSES Yamuna and Rajdhani and has indicated that it could push for the cancellation of their licences.
"The government is mulling cancellation of the licences of BSES Rajdhani and Yamuna over their poor performance and non-payment of dues. We have conveyed our issues to DERC, which has also observed the lapses in power supply," said a source in the government.
Officials, however, clarified that the government did not have any direct role in taking such a decision and could only make recommendations to DERC. "Under the Electricity Act, the government can make a case before DERC which, if convinced, will start proceedings. The discoms will also get a hearing during the proceedings, which can take extremely long," a source said.
Last week, power minister Satyendar Jain had written to Reliance ADA Group chairperson Anil Ambani over the poor performance of BSES and asked him to come for a meeting next week with a concrete roadmap on how he plans to improve the power situation in Delhi.
Jain had written: "They (BSES Yamuna and Rajdhani) were handed the responsibility of power distribution of two-thirds of Delhi in 2002. The expectation was that you would bring down tariffs and install a world class power system better than any other capital in the world. However, you have failed to do so."
"If the licences are actually cancelled, DERC will go in for fresh bids. There are several players in the business now, including government companies," said an official.
Sources in the electricity sector said that if the government succeeds in "coercing" DERC to suspend the licences, it will be a huge set back to the power reforms in the country. "Despite the unprecedented and continuous high power demand this year, the distribution network has been able to largely measure up. Delhi's power demand clocked 6,188MW - the highest ever - which is an increase of 23% from last year. While discoms have done well operationally, non-cost reflective tariffs and build-up of regulatory assets are straining their financial situation," said a source.
The source added that while cost of buying power increased by around 300% since 2002, retail tariffs were hiked by around 90% in the corresponding period.