Court Tells NTPC to Keep up Delhi Power Supply during Payment Row
March 27, 2014 2:55 PM EST
The Supreme Court on Wednesday told producer NTPC Ltd (NTPC.NS) to continue supplying power to New Delhi while it waits for money it is owed by a distribution company, avoiding a possible blackout in the country's capital.
An employee from the electricity board works on newly installed overhead power cables.
In an escalating battle over who should shoulder the rising cost of power in the city, distribution companies have said they cannot pay the money they owe while electricity tariffs are kept low and they suffer revenue shortfalls.
State-run NTPC had threatened in February to cut off power supply to BSES Yamuna Power, one of the three distributors in Delhi, if the company did not pay its bill.
But the Supreme Court reiterated that NTPC must maintain power supply even while it is owed money, and ordered BSES, part of billionaire Anil Ambani's Reliance Infrastructure Ltd (RLIN.AS), to pay the dues it owes since January 1, 2014. It did not specify the amount BSES must pay.
India's power sector, hobbled by rising debts and fuel supply shortages, has struggled to increase output to meet rising demand. Blackouts are common, hurting Asia's third-largest economy.
The case in Delhi reflects a growing demand in India, where many consider cheap or free power to be a right and not a privilege, for electricity tariffs to be kept low.
An anti-graft party claimed a surprise victory in Delhi state elections last year, partly on the back of promises to lower tariffs for voters.
But pressure to keep prices low makes it tough for distributors to force through tariff rises they say are necessary to keep pace with the increase in the cost of power.
The three distributors in Delhi say they face a revenue loss, built up over years of operations, totalling more than 150 billion rupees.
The Supreme Court said that over coming weeks it will seek information from the Delhi Electricity Regulatory Commission and BSES on how to resolve the revenue shortfall, and asked the commission to ensure there is no unnecessary delay in paying the gap.
Most Popular Slideshows
- Gennady Golovkin Next Fight Options: Canelo Alvarez, Miguel Cotto Or Julio Cesar Chavez Jr.
- NFL MNF: Pittsburgh Steelers 30, Houston Texans 23 [PHOTOS]
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Ebola Fears Cause Hysteria In United States And Around The World
- Kate Middleton Pregnancy Update: Duchess All Smiles In First Public Appearance, Sickness Seems Over
- Baby Corpses Found in Storage Locker in Canada
- Ebola Virus Might Reach Australia in Months; Health Dept Says Australia Prepared For Outbreak
- ISIS Taking U.S.-Airdropped Weapons An 'Embarrassment'; Another Yazidi Massacre Looming [VIDEO]
- No Mercy: ISIS, Father Stones to Death Daughter for Alleged Adultery
- Boy Stoned To Death For Alleged Rape, Victim Receives Dowry From Militants
- ASUS Releases A Teaser Indicating The Arrival of New Zenfone and ZenWatch On October 28
- Russia is Creating Underwater Combat Robots to Protect its Arctic Territories
- iOS 8 Jailbreak Release Date is Doomed as Team Evad3rs Opts Out, Pangu Hits Snag – Report
- Three Dual SIM Samsung Galaxy Note 4 Duos Variants Comes To China
- Google Nexus 6 vs. iPhone 5S: 4 Important Things to Consider Before Switching to Android Lollipop