Tehri Hydro Development Corporation (THDC) India Ltd has registered complaints with the Union Power Ministry against two Delhi electricity distribution utilities (discoms) for not paying the generator for electricity supplied by it.
In the wake of this, the power producer has requested the Ministry to allow it to divert the electricity it currently supplies to Delhi to other Northern States. THDC is a joint venture between Centre and Uttar Pradesh and supplies electricity to nine Northern States from the 1,000 MW Tehri and 400 MW Koteshwar hydro projects.
The two discoms – BSES Yamuna Power Ltd (BYPL) and BSES Rajdhani Power Ltd (BRPL) – have total outstanding of Rs 183.23 crore with THDC. Of this, Rs 132.56 crore is outstanding for more than 60 days.
During the past two years, the two Delhi discoms had been continuously defaulting and not paying on time, the Government power company told the Ministry. BYPL released Rs 2 crore on July 27, after a gap of 11 months as a result of requests and meetings at the senior-most level.
Similarly, the other discom, BRPL, has been releasing monthly payment equivalent to only one month of billing amount, and the backlog is not been squared up, THDC told the Ministry.
When contacted, a BSES official said that the dues that BYPL and BRPL owe to the generating companies have built up on account of a non-cost reflective tariff and unrestrained build-up of regulatory assets by the electricity regulator.
"The discoms' cost of buying power from gencos (generating companies) has increased by around 300 per cent, a cost on which discoms have no control. On the other side, the retail tariff in the corresponding period has risen by only around 70 per cent, which has resulted in accumulation of a large revenue gap. We are making payment to the power generators on a best effort basis and try to make the current payments," the official explained.
According to industry watchers, this kind of issue is not new. This is because the power purchase cost, which is not a controllable parameter, and is allowed by the law to be offset through a surcharge. However, the surcharge formula adopted by the Delhi Electricity Regulatory Commission (DERC) does not cover the entire cost.
According to DERC's statutory advice issued to the Delhi Government in February 2013, Delhi discoms had regulatory assets of over Rs 19,500 crore. Of these, the regulatory assets of BSES discoms are worth Rs 15,000 crore.
"Due to the persistent revenue gap highlighted above, BSES discoms are severely constrained to meet their day-to-day working capital and are frequently resorting to repeated lending from financial institutions to fund its shortage of working capital as well as its capex requirements," said an industry watcher.