* Distributors warned to keep supplying power
* Firms having trouble paying for the power they distribute
* Power generators have warned distributors to pay up
* Distributors say regulators have barred needed tariff
(Adds comments from power distributors)
NEW DELHI, Feb 4 The government of India's
capital, Delhi, has asked the region's power regulator to revoke
the licences of two electricity distributors if they fail to
supply power, drawing criticism from the companies.
The move reflects an escalating row between the newly
elected Aam Aadmi Party, which leads the government in Delhi,
and two distributors that have been warned to pay power
providers or risk being cut off.
The distributors are BSES Yamuna Power Ltd and BSES Rajdhani
Power Ltd, run by billionaire Anil Ambani's Reliance
"The proposed cancellation of licences in this situation is
arbitrary and illegal," BSES said in a statement.
State-run power producer NTPC Ltd said on Saturday
that BSES Yamuna Power, which sells electricity in the central
and eastern parts of the city of about 16 million people, must
pay its bills or be cut off from Feb. 11.
BSES Yamuna Power has already expressed its inability to pay
state-run power generation companies citing lower tariffs and a
shortfall in revenues.
The row could result in outages of up to 10 hours a day,
exacerbating the problems of Delhi Chief Minister Arvind
Kejriwal, who was elected in part on a promise of lowering
electricity tariffs for millions of Delhi's voters.
Delhi's power secretary, Puneet Goel, said on Monday in a
letter to the power regulator that if the distributors
maintained their stance the regulator "may not have an
alternative but to suspend their licences immediately".
"Extensive blackouts in the capital city of the country due
to financial difficulties of the these two (companies) is not
acceptable," Goel wrote.
In the event of the licences being revoked, "suitable
officers" would be appointed to administer the distribution
companies and keep power switched on, Goel said.
The distributors contend that the regulator has failed to
increase power tariffs in line with the rising cost of power,
leading to a revenue loss of more than 150 billion rupees ($2.4
BSES deemed the Delhi government's move to scrap its
licences an "extreme measure" and said that it was "extremely
surprised" that the matter had not been raised in a board
meeting last week.
Reliance Infrastructure runs the distribution companies,
with the Delhi government holding a 49-percent stake.
"The Delhi Government's proposed step is a huge setback to
power sector reforms, with grave repercussions for the country's
future economic growth," BSES said.
Kejriwal, a former anti-corruption activist, in December
asked the state auditor to look into the accounts of power
distribution companies to see if they were profiteering. The
companies have challenged the move in court.
($1 = 62.6925 Indian rupees)
(Reporting By Sruthi Gottipati and Devidutta Tripathy; editing
by Angus MacSwan and Jason Neely)