BackReliance Infra-backed discoms say under ‘huge financial stress’
The power discoms under BSES have outstanding dues to various generation and transmission firms of about Rs9,000 crore
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Reliance Infrastructure Ltd-owned BSES on Tuesday said it is under huge “financial stress due to non-liquidation of regulatory assets", a day after state transmission utility Delhi Transco Ltd (DTL) asked the company to pay outstanding dues of about ₹ 1,900 crore.
The power distribution companies under BSES—BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL)—have outstanding dues to various generation and transmission companies of about ₹ 9,000 crore, whereas the total money owed to BSES discoms is in excess of ₹ 16,000 crore, a BSES spokesman said in an email statement.
“The delay in liquidation of BSES’ revenue gap of more than ₹ 16,000 crore has created a grave financial situation for BSES discoms, resulting in unbearable stress in relation to payments to the various power utilities and other stakeholders," the statement said.
The Delhi Electricity Regulatory Commission (DERC) has acknowledged that total regulatory assets of BSES till 2013-14 stand at ₹ 8,000 crore, BSES said.
A regulatory asset is created when the regulator accepts certain expenditures but does not factor them in while determining present tariff. These expenditures are to be adjusted in future tariff and, in the interim, are accounted for as regulatory assets.
The controversy re-emerged after DTL said its cash flows and operations have been hurt due to non-payment from BRPL and BYPL and warned of power outages if the discoms failed to pay up. BSES has not paid its dues to DTL for over 15 months.
State government transmission utility DTL transmits power from central sector generating stations as well as from intra-state generating stations and makes it available for discoms in Delhi, which in turn make it available to end consumers in the city.
In response, BSES highlighted its own precarious financial position and said that the issue of payment of dues to power utilities is sub-judice in the Supreme Court. A judgement in the matter is reserved and awaited since February 2015.
“We are awaiting the SC (Supreme Court) judgement, which will clear the path of recovery/liquidation of the regulatory assets. BSES discoms are also making concerted efforts to address the situation and clear pending dues in a just and equitable manner," the spokesman said.
BSES discoms BRPL and BYPL are joint ventures between Anil Ambani-led R-Infra and the Delhi government, where R-Infra holds 51% stake.
“Since 2002, Delhi discoms’ cost of buying power has increased by around 300%, on which we have no control. However, the retail tariff has increased by around 90% in the corresponding period. Around 85% of total discom cost is power purchase cost, which is uncontrollable by the discoms," the statement said.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay High court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.
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