Our outgoings costs are much more than tariff, BSES tells SC

New Delhi: Power discoms BSES Rajdhani and Yamuna Monday told the Supreme Court that there was a mismatch in the cost of the power supplied by it to the consumers in the national capital and the tariff it was getting for the same, leaving a big revenue gap.

“Our outgoings are much more than the returns we got for supplying power,” the power distribution companies told a bench of Justice J. Chelameswar and Justice S.A. Bobde pointing to the cash crunch being faced by it.

“The outgoings are higher. The tariff is fixed by the regulator DERC. The tariff is not cost reflective. I am borrowing from the banks. This results in regulatory assets. Now banks are not paying more,” senior counsel Kapil Sibal, appearing for the BSES, told the court explaining the financial difficulties his client was facing on account of gap due to disparity tariff.

Senior counsel P.Chidambram also appearing for BSES, told the court that “everybody is right. We are right. Power generating companies are right. Transmission companies are right. But we are not getting tariff matching our costs. We are in a difficulty in complying with the court’s order”.

“We don’t have a capacity to comply with your order (of March 26, May 6, and July 3),” Chidambram told the court as it adjourned the matter for Dec 16 feeling it required detailed hearing. The court was hearing two applications by BSES pointing to cash crunch being faced by it in meeting the current dues of the power generating companies.

Assuring the court that discoms will do their best to comply with the court orders on the payment of current dues, he urged the court to ensure that Delhi should not go dark indicating the apprehension that the power generating companies may not discontinue the supply.

“We will do our very best to comply with the court’s order. But Delhi should not go dark,” he said.

At this, Justice Chelameswar, referring to both being senior ministers in the erstwhile Manmohan Singh government, said: “Mr. Sibal and Mr. Chidambram, who knows better than both of you that no government will take the risk of Delhi going dark.” 

“Government can’t take the risk of national capital going dark and also its strategic importance,” he observed as a counsel added” “With election to Delhi assembly around.”

Appearing for Delhi government and a group of power generating companies, Additional Solicitor General Tushar Mehta told the court said that another discom Tata – NDPL – was paying all the current dues without default.

“There is something commercially wrong with them (BSES),” he said.

Senior counsel K.K.Venugopal, appearing for the NTPC, told the court that after foregoing the past dues, even the current dues were not being paid.

“We have to pay for the coal” which we buy for generating power, he told the court. 

BSES Rajdhani and BSES Yamuna have sought the modification of the apex court orders of March 26, May 6, and July 3 by which the court had mandated the discoms to pay the current dues from Jan 1 as and when raised by the power distribution and transmission companies.