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Standby charges -- Pay up or face cut-off, TEC tells BSES

Our Bureau

MUMBAI, Oct. 27

TATA Electric Companies (TEC), which would formally be known as Tata Power in about six weeks, will have to take the ``extreme step of disconnecting back-up supply to BSES Ltd,'' if the latter does not pay up the standby charges due, the TEC Managing Dir ector, Mr Adi Engineer, has said.

BSES has paid only Rs 30 crore out of Rs 181.5 crore due from it, according to Mr Engineer.

Addressing a press conference here on Friday, Mr Engineer said BSES was using the public ``as a shield in times of crises.'' Citing the example of Diwali eve, he said, when the BSES power supply tripped, ``we could not just not supply because it was Diwa li time.'' BSES is the main distributor of electricity to domestic consumers.

He said even though TEC had given BSES the disconnection ultimatum, it could not imagine the city suburbs drenched in darkness on the eve of the festival of lights.

Elaborately outlining the history of TEC's standby charges dispute with BSES, Mr Engineer said the default by BSES had ``upset the commercial equilibrium'' of the power scenario of Mumbai.

The standby charges dispute has been raging ever since full generation started at the Dahanu power plant of BSES in 1997.

The major issue, according to TEC, in a nutshell, is that TEC has been unfailingly paying standby charges of about Rs 363 crore to MSEB. Standby capacity is related to the licensee's single largest generating unit. TEC's largest unit is of 500 MW capacit y and BSES' largest is of 250 MW capacity. Hence BSES' standby requirement is half of that of TEC.

Since TEC provides the back-up to BSES from the standby it gets from MSEB, it contends that BSES pay half of what TEC pays MSEB -- half of Rs 363 crore, i.e., Rs 181.5 crore -- as per a tripartite understanding.

BSES' contention is that it has been paying maximum demand charges which is the same as standby charges. This argument was not accepted by a committee that had been set up by the Government under the chairmanship of the State Energy Secretary and represe ntatives of all concerned in the matter to arrive at a long-term solution once and for all.

The State Government, in an order dated March 22, 2000, confirmed the panel's findings and asked BSES to pay up the amount pending to TEC. But BSES dissented with the findings and took a stand that the issue could only be sorted out through bilateral neg otiations and that the Government order was not binding on it. Subsequently, the Government issued two orders, one on June 5 and another on July 6, ordering BSES to pay its share of the standby charges.

However, BSES has stood by its stand that it would not pay any more standby charges as the Government order was irrelevant until it makes fresh agreement with TEC.

According to Mr Engineer, BSES is a licensee of the Government. Hence, it is for the Government to take requisite action to enforce its order. He said his company was confident that the Government would implement its order expeditiously.

Pic.: (From left) Mr Adi Engineer, Managing Director, Tata Electric Companies, and Mr N.K. Gupta, Deputy General Manager, TEC, at a press meet held in Mumbai on Friday.

Picture by Shashi Ashiwal