NEW DELHI: 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.
This is the first time the Power System Operation Corporation (POSOCO), a body of the power ministry, invoked the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 to bar discoms from alternative short-term sources.
Power distribution companies (discoms) of four states in the south Andhra Pradesh, Tamil Nadu, Telangana and Karnataka are among those on the ban list. The Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, which was notified this June mandates discoms to pay a late payment surcharge (LPS) on the outstanding amount after the due date of payment.
The rate of late payment surcharge for the successive months of default will increase by 0.5 per cent for every month of delay, provided the late payment surcharge will not be more than 3 per cent higher than the base rate at any time. Any further delay would invoke penalty provisions, including a complete ban on buying short-term power from the spot market and thereafter regulation of medium-term and long-term power supply. However, power experts called the action of POSOCO one-sided.
The chairman of All India Power Engineers Federation Shailendra Dubey said Posoco 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 the government departments’ electricity dues. If this Rs 1,43,000 crore is paid by respective state governments to discoms, then discoms will pay dues of gencos,” said Dubey.