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Tags: National Economy/Finance
The Union government has barred 27 electricity distribution companies (discoms) of 13 states from buying or selling electricity in power exchanges from 19 August 2022, due to their non-payment of dues to power generating companies (gencos).
The directive was issued by the Central government owned Power System Operation Corporation (POSOCO) Limited, which runs the national grid on 18 August 2022.
This has been done by the government under the new Late Payment Surcharge (LPS) rules.
Under the LPS rules, discoms which do not pay pending dues of the last seven months to the gencos are barred from power exchanges.
This is perhaps the first time that the government has taken such a strong step to make the state government pay dues to the Power generating companies in India. Earlier, the Centre put such limitations on one or two defaulting states, and withdrew it quickly.
States and their dues
The total dues of these 13 states discoms to the power generating companies are Rs 5,085 crore.
The break up State wise dues are as follows:
Madhya Pradesh (which owes ₹229.11 crore), Telangana (₹1,380.96 crore), Rajasthan (₹500.66 crore), Maharashtra (₹381.66 crore), Karnataka (₹355.20 crore), Andhra (₹412.69 crore), Tamilnadu (₹926.16 crore), Jharkhand (₹214.47 crore), Bihar (₹173.50 crore), Chhattisgarh (₹27.49 crore), J&K (₹434.81 crore), Manipur (₹29.94 crore) and Mizoram (₹17.23 crore)
What is a Power Exchange
It is an online electronic platform where power (electricity) is bought and sold. It is used to determine the market price of the electricity.
How many Power exchange are there in India
There are three power exchanges in India
Indian Energy Exchange (IEX)
It is the first power exchange to be set up in India. It started its operation in 2008. It is based in New Delhi.
Power Exchange of India (PXIL)
It also started its operation in 2008. It is based in Mumbai.
Hindustan Power Exchange (HPX)
It is the third Power exchange in India which became operational in 2022.It is based in Mumbai.
Who regulates the Power Exchange in India
The power exchanges in India are regulated by the Central Electricity Regulatory Commission (CERC) which is a statutory authority constituted under the Electricity Act 2003.
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