The Union power ministry on Thursday barred 13 states from buying or selling electricity from the spot market for not clearing dues of Rs 5,085 crore to power generators. Uttar Pradesh does not figure in the list of defaulter states.
The Power System Operation Corporation (POSOCO), the national grid operator under the power ministry, will implement the order for debarring 12 states and a Union Territory (UT) from buying/selling electricity at the spot market as a penalty for not clearing their dues to the generators.
They are power distribution companies (discoms) in Andhra Pradesh, Tamil Nadu, Telangana, Karnataka, Bihar, Jharkhand, Madhya Pradesh, Maharashtra, Chhattisgarh, Jammu and Kashmir, Rajasthan, Manipur and Mizoram. Telangana tops the list of defaulters with Rs 1,380 crore outstanding.
The All India Power Engineers Federation has criticised the order saying `` the POSCO is implementing provisions of the Electricity (Amendment) Bill, 2022, which has been referred to the standing committee and could not be passed in the Lok Sabha.
“State governments owe Rs 76,000 crore on account of subsidy and Rs 67,000 crore on account of electricity dues of government departments. If this Rs 1, 43,000 crore is paid by respective state governments to discoms, then discoms will pay dues of gencos,” AIPEF chairman Shailendra Dubey said.
This is the first time that the grid operator has invoked the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, to penalise discoms by disallowing them to buy electricity from alternative short-term sources. The discoms will be unable to purchase additional power from the spot market while supply from their long-term agreements with gencos will continue. Long-term supply too can be regulated if the default continues.
The rules, which were notified in June this year, pertain to payment discipline of discoms, which are bound to fork out a late payment surcharge (LPS) on the outstanding amount within one month of the due date of payment. The rate of LPS for successive months of default will increase by 0.5 per cent for every month of delay. A further delay in clearing the dues beyond two and a half months of default will attract penalty provisions.
The move to regulate power purchase from the spot market would cool prices at power exchanges because there will be fewer buyers. “The options are being reduced to push them (discoms) towards payment discipline,” said a senior official.
The dues of state-owned discoms to gencos are rising even after two schemes to liquidate them. The lion’s share of the dues is to privately owned or independent power producers (IPPs). Renewable power units too continue to see an increase. The dues of discoms crossed Rs 1.2 Lakh crore trillion by July 2022.