Power producer says may cut supplies to India's capital

NEW DELHI Sat Feb 1, 2014 10:26am EST

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NEW DELHI (Reuters) - India's top power producer NTPC Ltd said on Saturday it might cut supplies to a company that distributes electricity to parts of New Delhi, something that could plunge the heart of India's capital into darkness.

State utility NTPC said distribution company BSES Yamuna Power Ltd, which sells electricity in the central and eastern parts of the city of about 16 million people, must clear its dues or else supplies would be cut from February 11.

Citing lower tariffs and a shortfall in revenues, BSES Yamuna Power Ltd, an arm of Reliance Infrastructure Ltd, has already expressed its inability to pay state-run power generation companies.

The row could result in an outage of up to 10 hours a day, exacerbating problems for Delhi's newly-elected Chief Minister Arvind Kejriwal, elected on the promise of cutting electricity tariffs for millions of Delhi's voters.

Kejriwal, a former anti-corruption activist, recently asked the state auditor to look into the accounts power distribution companies to see if they are profiteering. The companies have challenged the move in a court.

BSES Rajdhani Power Ltd and Tata Power Delhi Distribution Ltd are the other companies that sell electricity to consumers of Delhi.

BSES Yamuna Power Ltd on Friday warned the local government of power cuts and Kejriwal responded with a warning of a possible cancellation of its licences. But Delhi's power sector regulator approved a 6-8 percent tariff increase.

(Reporting by Mayank Bhardwaj; Editing by Robin Pomeroy)

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