Amid free electricity debate, Delhi’s generation companies enlist AG to fight BSES in SC, Legal News, ET LegalWorld – Legal Firms

NEW DELHI: Amid the ongoing debate over free or subsidised power and their ill effect on the finances of distribution companies, Delhi government’s generation companies have enlisted the country’s top law officer to represent them in the Supreme Court in an eight-year-old payment dispute with BSES distribution companies.

Sources said Indraprastha Power Generation Company Ltd and Pragati Power Corporation Ltd have appointed attorney-general (AG) R Venkataramani to represent them in the suit seeking full payment for the power they supply to BSES for distribution.

This is perhaps the first time that the country’s top two federal law officers are being deployed in a suit involving recovery of dues from a discom as solicitor-general Tushar Mehta, the second senior-most law officer, is representing the power ministry that has been made a party.

The move to rope in the AG comes amid recent reports of the LG’s office taking a closer look at Delhi’s power sector and ups the ante against non-payment of power dues to generation companies. The next hearing is scheduled on December 13.

The case in question goes back to 2014 when Delhi gencos threatened to cut supply for non-payment. BSES moved the apex court, arguing that it was unable to pay in full because the tariffs set by the Delhi power regulator did not cover the costs fully.

The court stayed disconnection and asked BSES to pay 70% of the current dues. In 2016, the court extended the status quo and ordered the generation companies against taking any coercive action till the final order. In September this year, the relief was extended, setting off a rethink on the handling of the case and the decision was taken to rope in the AG to argue the case better on behalf of the distribution companies.

BSES has two distribution companies in Delhi — BSES Yamuna and BSES Rajdhani — serving over 34 lakh consumers and sources roughly 800 MW of power from the two generation companies.

Distribution companies running up dues of generation companies has become a bane of the country’s power sector. A key reason is that the regulators in the state are guided by the populism of the ruling dispensation, who appoint them, and do not allow timely or adequate increase in tariffs to match costs of supply.

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