Delhi residents spared power black-out as Reliance promises to clear dues

Millions of Delhi residents will be spared a power black-out from Wednesday, as the two subsidiaries of Reliance Infrastructure have promised to immediately clear the dues to state-owned National Thermal Power Corporation (NTPC).

''BSES, Delhi's leading power distribution company, has ensured that no inconvenience would be caused to its 2.8 million consumers in the capital, as a consequence of the recent notice by NTPC to discontinue it power supply,'' the company said on Monday. ''BSES stands committed to supply uninterrupted quality power to our consumers and will make all efforts to ensure no inconvenience.''

NTPC, which supplies 2,051 MW of power to BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd, had threatened to discontinue supplies from Tuesday midnight, as the two companies owed it about Rs900 crore (See: Large parts of Delhi face power cut from Wednesday).

However, considering the massive negative publicity that the discontinuation of power to millions of residents in the national capital might cause, Reliance Infrastructure decided to immediately clear the dues.

Power distribution in Delhi was privatised in 2002 and handed over to two major energy groups – the Anil Dhirubhai Ambani-controlled Reliance Infrastructure, and the Tatas. While the two BSES units supply power to south, west, central and east Delhi, North Delhi Power Ltd, part of the Tata empire, supplies electricity to parts of northern Delhi.

The three private producers signed power purchase agreements with the NTPC following an order of the Delhi Electricity Regulatory Commission (DERC) in 2007.

But Reliance Infrastructure has been reporting mounting losses following the delay by the regulator in enhancing power tariffs. The company claims that it has accumulated loss of Rs.9,000 crore because of inadequate tariff and has had to finance this through debt.

BSES Rajdhani and BSES Yamuna also claim that they lose Rs2 for every unit of power that is supplied to consumers in their licensed area. The DERC recently allowed the distributors to hike tariffs by 22 per cent, but the company claims this is inadequate.