FE: UPPCL banned from buying power from exchanges on alleged lapses

24 August 2019: In a severe blow to Uttar Pradesh Power Corporation (UPPCL), Power System Operation Corporation (Posoco) has blocked the company from purchasing any electricity from power exchanges due to alleged lapses.

UPPCL has faced the action for deliberately keeping state power generating companies, including independent power producers, out of the ambit of the Union power ministry’s order regarding implementation of a payment security mechanism-based scheduling of power at intra-state level.

Imposing curbs on the UP company from August 20, Posoco said that “short term open access (STOA) bilateral transactions for purchase of power by UPPCL will not be granted by NRLDC”.

It advised power exchanges not to allow purchase of power by UPPCL till a written confirmation is received from SLDC, UP, stating that payment security in respect of intra-state generators is available.

Faced with this piquant scenario, the cash-strapped UPPCL has asked its power distribution companies (discoms) to launch a drive to disconnect electric supply of consumers who have more than `10,000 dues and have not paid any bill since April 1.

UPPCL chairman has asked discom MDs to undertake at least 250 disconnections in each division of all districts. He is believed to have told them that it would not be possible for the UPPCL to provide uninterrupted power unless it was paid for.

It may be mentioned that UPPCL had made arrangements to issue letters of credit (LCs) worth `2,100 crore for inter-state power on a weekly revolving basis, which effectively kept the intra-state power generation companies (gencos), including both the state-owned generating stations as well as private power generating units, out of the system.

Interestingly, NTPC and NHPC, the two major CPSUs, have always had a payment security mechanism with UPPCL. Other plants that have now been covered under the LC system are the four Case-I plants – KSK Power, MB Power, PTC TRN and RKM Power, NPCIL, Meja Thermal Power and some solar power producers.

Private power producers that have been kept out of the ambit include Bajaj’s 1980 MW Lalitpur Power Plant, Lanco’s 1200 MW plant, Prayagraj Power 1980 MW plant in Bara, Reliance Power’s 1200 MW Rosa thermal power plant, GVK Hydro’s 330 MW Alaknanda plant and Bajaj Energy’s 450 MW.

“The UPPCL had deliberately misinterpreted the MoP order. The entire effort behind the Centre’s circular was to put an end to the erratic payment behaviour of discoms. It is a clear-cut order and there was no scope for misrepresentation,” said a power sector specialist on condition of anonymity.

According to sources, UPPCL authorities are trying to persuade Bajaj Energy to withdraw its complaint and help lift the ban on it buying power from the exchanges by assuring it that a certain amount of payment would be made to them every day.

The Financial Express reported

Categories: General News, India Bankruptcy

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