A day after Hindustan Times reported that power distributor BSES — which distributes power to east, south, central and west — have filed a petition with the Delhi Electricity Regulatory Commission (DERC) seeking an interim tariff hike because of severe cash crunch, the distcom has now been refused help by the government.
On Tuesday, the Delhi Power Company Limited (DPCL) — the government’s holding company in the power sector — in its board meeting rejected a petition submitted by BSES Yamuna Power Limited (BYPL) seeking a soft loan of Rs 200 crore to tide over its present cash crunch. The board reused to bail out BYPL and asked the distcom to meet the expenses on its own.
“BYPL had written to DPCL asking for a soft loan with negligible rate of interest to tide over the severe cash crunch. But the board was of the view that since the five-year transition period of power privatization when government gave subsidy to distcoms to help stabilize their operations is over, the latter should fend for itself,” said a senior official who attended the board meeting.
A BSES official, on condition of anonymity, said, “It is unfortunate. We have requested for a grant as there was a precedent for this. DPCL had earlier granted soft loan to Delhi Transco, the government-owned transmission utility. And anyway we would have repaid the loan.”
Last month, distcoms BYPL and BRPL filed a petition with DERC seeking an interim tariff hike till such time the power tariff for the current fiscal 2007-08 is announced. The power tariff for 2007-08 — under the recently notified Multi Year Tariff regulations where power prices will be fixed for a four-year period — is expected by December. DERC will take a decision in this matter in the middle of August.
The reason cited by the distcoms for the interim hike was that they were facing a severe cash crunch owing to the costly power that they had purchased from Himachal Pradesh. The Himachal government has refused to take back the costly power that Delhi Power Procurement Group (DPPG) had bought from it for a seven-month period between April and October at a cost of Rs 7.29 per unit.
Power Secretary Rakesh Mehta had said DPPG had tied up with Himachal for the costly power anticipating a power shortage.