* State-run power producer told to keep supplying
* Next hearing in the case on March 26
* Power generator warned distributors to pay up or face Feb.
* Distributors complain regulator has failed to increase
(Adds details, context)
NEW DELHI, Feb 7 India's Supreme Court on Friday
ordered state-run power producer NTPC Ltd to continue
supplying power to distribution companies in the capital, New
Delhi, until March 26, in a move that averts a blackout next
The decision is the latest development in an escalating row
between the newly elected Aam Aadmi Party, which leads the
government in Delhi, and distributors that have been warned to
pay power providers or risk being cut off.
"Finally, the consumer would be the sufferer," said Justice
S.S. Nijjar, one of the two judges on the panel issuing Friday's
order, which asked NTPC to maintain supply until the next
hearing in the case, set for March 26. "Think about them."
Many Indians see cheap or free power as a right, not a
privilege, and politicians are often tempted to give in to this
view, particularly as national elections approach by May.
But by keeping tariffs low, politicians have strained the
finances of distribution companies, which often resort to
crippling power cuts. Such blackouts in turn hobble the
competitiveness of Asia's third-largest economy.
BSES Yamuna Power, which sells electricity in the central
and eastern parts of New Delhi, home to about 16 million people,
had faced a threat from NTPC that supply would be cut off from
Feb. 11 if it did not pay its bills.
The firm, an arm of billionaire Anil Ambani's Reliance
Infrastructure Ltd, runs two electricity distribution
companies in the capital in a joint venture with the state
government. It had said lower tariffs and a revenue shortfall
meant it could not pay.
The judges also ordered BSES to pay 500 million rupees ($8
million) to NTPC as part of its outstanding dues. Together, the
two distribution companies now owe NTPC 6.92 billion rupees
The Delhi government had asked the region's electricity
regulator to revoke distributors' licences if they halted
supply, drawing criticism from the firms who say the regulator
failed to ensure power tariffs keep pace with rising costs.
India's power sector has been marred by years of rising
debts, fuel supply shortages, corruption, red tape and tariffs
kept artificially low by populist politics.
In 2012 the federal government announced a $32-billion
bailout package to fix the financial health of state-run power
($1=62.5225 Indian rupees)
(Reporting by Suchitra Mohanty,; Writing by Devidutta
Tripathy,; Editing by Angus MacSwan)