BSES Yamuna Power Limited

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On July 1, 2002, Bombay Suburban Electric Supply Company (BSES) acquired 51 percent stake in Central East Delhi Electricity Distribution Company Limited and took over its management and operation from the Government of National Capitol Territory in Delhi (NCT). The distribution company was renamed BSES Yamuna Power Limited (BYPL) after the take over. BYPL’s service area included central and east regions of Delhi and was responsible for all power distribution activities - supplying electricity, metering, billing, and controlling transmission and commercial losses and power thefts. The partial divestiture of BRPL was part of a major restructuring effort undertaken by NCT to privatize the distribution portion of Delhi Vidyut Board (DVB), a vertically integrated state owned power enterprise. DVB was functionally unbundled into six companies in 2001 – a generation company, a transmission company a holding company and three distribution companies. BSES Yamuna Power Limited was one of three companies to which the distribution assets of DVB were transferred. The other two companies were BSES Rajdhani Power Limited and North Delhi Power Limited. BSES acquired 51 percent stake in BYPL for Rs 5,900 lakhs (US$ 12.3 million) and the remaining 49% was held by Delhi Power Company Limited (DPCL), a holding company fully owned by NCT. BSES won the tender by committing to reduce aggregate technical and commercial (ATC) loss by 17.25 percent in the first five years of the take over. BSES estimated an investment of US$ 105.26 million to meet the ATC targets. BSES also bought a 51 percent stake in BRPL and Tata Power took over NDPL. Delhi Electricity Regulatory Commission, regulator of Delhi’s power industry, was responsible for setting tariffs for electricity, licensing new capacity, and prescribing performance standards. There was to be a uniform retail tariff all over Delhi for the first five years of the privatization but the bulk supply tariff for each distribution company was based on its paying capacity. To avoid sudden increase in retail tariffs, the Delhi government (NCT) also committed up to Rs 3,450 crores (USD $ 720 million) for the first five years in the form of discounted price for the bulk power that the three distribution companies purchased from the state owned transmission company but no specific amount of money was targeted for each distribution company. NCT also committed to a 16% return on the invested capital of the private distribution companies. In January 2003, BSES became part of the Reliance Group and was renamed Reliance Energy Limited.