Power System Operation Corporation (POSOCO) has debarred 12 states and a Union Territory (UT) from buying/selling electricity at the spot market as a penalty for not clearing their dues to generators. POSOCO is the national grid operator under the power ministry.
Key highlights
- Among them 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.
- The defaulting discoms cumulatively owe Rs 5,000 crore to gencos, the highest being in Telangana with Rs.1,380 crore.
- This is the first time 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 rules were notified in June 2022.
- 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 pertain to the 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.
- As per the rules, the short-term power supply to the defaulting entity shall be regulated entirely as per the process set in LPS Rules.
- Continuing default after regulation of short-term power supply, or continuing default in non-payment of the for three and a half months, would result in regulation of long-term access and medium-term access by 10 per cent, with progressive rise of 10 per cent for each month of default.
- This entails a complete ban on buying short-term power from the spot market and thereafter regulating medium- and long-term power supply.
(Source: Financial Express)
