NTPC threatens cutting off Delhi’s power supply

News:

State-owned power generator NTPC Ltd has threatened to cut off the national capital’s power supply over alleged non-payment of dues by Anil Dhirubhai Ambani Group (ADAG)-owned power distribution companies BSES Rajdhani (BRPL) and BSES Yamuna (BYPL).

“In case, overdue payments are not immediately forthcoming, NTPC may be constrained to consider all options, including regulation of power supply, in the coming period,” the country’s largest electricity producer said. It added continued non-payments by Delhi Discoms would make it very difficult for NTPC to keep maintaining its reliable supplies in the ensuing peak summer season where the demand of Delhi is supposed to peak at 6,600 Megawatt as per DISCOM estimates.

When asked for comment, a BSES spokesperson said the two discoms are under huge financial stress due to non-liquidation of regulatory assets which are over Rs 16,000 crore as on March 2016. As compared to this, total overdues payable by BYPL to APCPL (a Joint Venture of NTPC, Delhi government and Haryana) is around Rs 239 crore, and this power is already being regulated for the last few months.

“BSES discoms are in regular touch with APCPL to get the regulation lifted, as also making concerted efforts to address the situation and clear pending dues in a just and equitable manner,” the BSES spokesperson said.

He added the payment of dues to power utilities by BSES discoms is sub judice in the Supreme Court and the judgement in the matter is reserved since February 2015. “We are awaiting the Supreme Court judgement, which will clear the path for recovery or liquidation of regulatory assets. Consumers will continue to get reliable power supply,” he said.

NTPC is the major supplier of power to the National Capital Territory (NCT) of Delhi which has a total allocation of 3,930 Mw from NTPC including 693 Mw from APCPL Jhajjar . Of this allocation, more than 2,000 Mw is allocated to the two BSES Discoms. NTPC supplies electricity worth around Rs 300 Crore to the BSES discoms every month.

As per the terms of the Power Purchase Agreement (PPA) between NTPC and BSES discoms, the payments of energy bills are to be made within a calendar month. NTPC, however, alleges the two discoms (particularly BYPL) are not making these payments as per the agreed provisions of the Power Purchase Agreement.

“It may be recalled that for a similar situation, NTPC had issued a notice for regulation of power to these discoms in May 2016. Subsequently, after discussions with the discoms and assurance of liquidation of outstanding dues by this financial year, NTPC had kept this regulation notice in abeyance. However, despite a lapse of almost 10 months, there is an outstanding amount of Rs 239 crore overdue for payment from BYPL,” NTPC said.

The company claims that fuel alone accounts for around 70 per cent of its generation cost and that has already been paid to fuel suppliers like Coal India (CIL). NTPC had issued a similar threat in May last year saying it would have to suspend supplies for the BSES discoms if they fail to cough up Rs 1,300 dues. The generator had then issued notices to the discoms on non-payment of dues.

My View:

Most of the Private DISCOM's situation in India is in dismal state. In this case according to PPA the payment must be settled within a month,but due to financial problem of BSES they are not able to pay the dues. Companies like BSES should analyse first the situation then they should finalize the power purchase agreement with any Generators.

Haryana discom reports Rs201 crore profit in first half of 2016

My View:

It can be said that this is the result which Power ministry was expecting from UDAY scheme. Dakshin Haryana Bijli Vitaran Nigam Ltd has done significant work to come out of loss making DISCOM to profitable DISCOM. However the Uttar Haryana Bijli Vitaran Nigam Ltd has been incurring losses. Lets see whether the states which have accepted UDAY can bring some good news like this in future.




News:

One of the two state-owned power distribution companies in Haryana, Dakshin Haryana Bijli Vitaran Nigam Ltd, has become the first power utility to turn around under rescue scheme Ujjwal Discom Assurance Yojna (UDAY), rolled out in November 2015, raising hopes that fortunes of the entire electricity value chain including of coal mining and power generation will benefit from better electricity demand in coming days.

An analysis of the financial health of the utility released by the power ministry on Thursday said the company has reported “remarkable achievement of turnaround” from a loss of Rs479 crore in 2015-16 to a profit of Rs201.35 crore in the first half of 2016-17.

Turnaround of distressed state power distribution firms is crucial for the health of other segments of the electricity value chain which depends on power offtake. Better power demand from distribution firms will help generation companies, especially thermal power plants, to step up their capacity utilisation which is currently at about 60%. Coal demand, too has been sluggish in the past as loss making distribution firms were not able to cater to the actual energy demand.

Monthly coal production recovered from a contraction and grew for the first time in three months in November, indicating improving power demand during winter.

As per data from state-owned monopoly Coal India Ltd (CIL), monthly production grew 5.3% to 50 million tonnes in November from a year ago, after a bearish trend in mining since August when output had shrunk by 10%.

The power ministry analysis said that the Haryana utility still has to improve upon its performance in meeting the target of lowering losses on account of billing inefficiency and power theft.

The UDAY scheme rolled out last November gave performance and efficiency improvement targets to loss making utilities in order to narrow their gap between cost of power supply and the price realised from consumers. Their accumulated debt up to September 2015 was allowed to be taken over by respective state governments to make available low cost credit.

Haryana’s second distribution firm, Uttar Haryana Bijli Vitaran Nigam Ltd, however, continued to make losses in the first half of this year. It reported a loss of Rs1,233 crore in the first half against the loss of Rs336 crore in the full year of 2015-16, said the analysis.