Centre bars 13 states from power exchange over dues

The Centre on Thursday barred 27 distribution companies (discoms) across 13 states from buying or selling electricity in power exchanges citing their non-payment of dues to generation companies (gencos). The affected states said the move could lead to power outages , even as some immediately started clearing their outstanding amounts to avoid a power crisis.

The restriction came into effect from Thursday evening and delivery of power will be stopped from Friday. Late on Thursday, six of the 13 states were allowed to trade in power exchanges after they claimed no outstanding dues.

A power exchange is an electronic platform on which power is bought and sold by distribution companies so as to determine the right market price and the best consumer/seller. It ensures market transparency and also helps utilities procure power to meet spikes in demand.

The state-owned Power System Operation Corporation (POSOCO) Limited, which rns the national grid, issued the directive to India’s three power exchanges , Indian Energy Exchange (IEX), Power Exchange of India (PXIL) and Hindustan Power Exchange (HPX) , asking them to restrict trade of electricity by discoms from 13 states. It also conveyed the same to the 13 defaulting states, Madhya Pradesh ( which owes ₹229.11 crore), Telangana ( ₹1,380.96 crore), Rajasthan ( ₹500.66 crore), Maharashtra ( ₹381.66 crore), Karnataka ( ₹355.20 cr), Andhra Pradesh ( ₹412.69 cr), Tamil Nadu ( ₹926.16 cr), Jharkhand ( ₹214.47 cr), Bihar ( ₹173.50 cr), Chhattisgarh ( ₹27.49 cr), Jammu and Kashmir ( ₹434.81 cr), Manipur ( ₹29.94 cr) and Mizoram ( ₹17.23 cr).

“These 27 discoms shall be entirely restricted till further notice from the delivery (of power) date of August 19, 2022 (Friday). The action appears to be taken under the Electricity (Late Payment Surcharge and related matters), Rules 2022 notified by the power ministry in June this year. LPS rules bar discoms from power exchanges if they don’t pay pending dues to gencos for over seven months,” a senior power ministry official said on condition of anonymity.

The official added that this is the first time such a high number of discoms have been barred from transacting in the power exchanges due to non-payment of dues. Earlier, such restrictions have been imposed on a few power utilities, but also lifted almost immediately.

An official from POSOCO said that as soon as the letters were sent to states, some governments requested for extension of trading time in the exchanges, so that they could pay up the dues and then buy power. “Hence, trading in power exchanges were extended by about two hours on Thursday, although a few states could not take part in the day-ahead trade,” the official said, requesting anonymity.

Some states rushed to pay their dues to prevent a crisis. Madhya Pradesh’s principal secretary (power) Sanjay Dubey said the state government is working on resolving the issue. “Talks are going on. We have already initiated the process of paying dues.”

Telangana state power transmission corporation chairman and managing director Devulapalli Prabhakar Rao told HT that the state has replied to the mail sent by the Union ministry of power to Telangana and the other states on the restriction. “We told them that all the payments indicated in PRAAPTI Portal (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators) have been made. The Telangana high court, acting on a writ petition filed by the Telangana government, had issued an order on April 25, 2022, allowing Telangana power distribution companies (Discoms) and Telangana State Power Coordination Committee (TSPCC) to operate through the power exchange as well as secure power through open access without any hindrance, pending disposal of the petition. So, we have asked the Union power ministry not to take any further action restricting the Telangana power utilities either from drawing or selling power through exchange,” said Rao.

A senior official of Andhra Pradesh’s energy department said discoms in the state have recently subscribed to the LPS scheme, under which all power generator dues till 2022 would be cleared in 12 equated monthly instalments over the next year. “AP discoms have already paid the first instalment of ₹1422 crore to generators on August 6, 2022. Perhaps, the payment has not been updated in the records and hence, they might have issued the notice. It shall be clarified in the next 24 hours.”

A senior official of Rajasthan Urja Nigam said, “The sudden notice is not acceptable and talks are on to resolve the issue. A sum of around ₹500 crore is outstanding, a part of which is admissible and rest is under dispute. They should have given a notice . Now there will be a three day government holiday, how will it be possible to settle the outstanding? But Rajasthan will be having surplus wind energy for the next two days, so we will be able to manage till the issue is resolved.”

(with inputs from Rajasthan, Telangana and Madhya Pradesh bureaus)