States overdraw power, fail to make payments

States overdraw power, fail to make payments

Repeated overdrawing of power, and then not paying for it has run up Rs1,100 crore in dues, by just two states, Uttar Pradesh (UP) and Jammu and Kashmir (J&K).

What is more worrisome is that the tendency of states to draw extra power exposes the country’s electricity grid to a potential collapse.

“In spite of being the worst offenders, they are yet to submit their dues. There are other states as well that make late payments but these two have the worst track record," said a senior Northern Regional Load Dispatch Centre (NRLDC) official who did not wish to be identified.

NRLDC is responsible for maintaining grid discipline and supervising optimum scheduling and dispatch of electricity in the northern region. It also collects charges known as unscheduled interchange (UI) from states and makes the payment to generation firms such as NTPC Ltd.

At present, there are five regional grids in India—northern, southern, eastern, northeastern and western—and all of them, except the southern one, are interconnected. Their operations are taken care of by NRLDC, Southern Regional Load Dispatch Centre (SRLDC), Eastern Regional Load Dispatch Centre (ERLDC), North Eastern Regional Load Dispatch Centre (NERLDC) and Western Regional Load Dispatch Centre (WRLDC), respectively.

While UP owes Rs700 crore, J&K owes Rs400 crore. The states have been accumulating the dues since 2003-04.

Officials from the state electricity board of both states could not be reached for their comments.

UI, which is the maximum price of overdrawing power from the grid, needs to be paid by a state if it draws more power than the quota allotted to it.

Due to the scarcity of power supply, overdrawal of power by states has become a cause for concern. India currently has a power generation capacity of 135,000MW and plans to add another 78,000MW by 2012.

As a result, the Central Electricity Regulatory Commission, the sector regulator, has recently issued draft regulations proposing to increase the UI rate from the present level of Rs7.45 per kWh to Rs10 per kWh when the grid frequency goes below the least permissible value of 49Hz.

Frequency, say experts, is the most critical parameter in power system operation, with the global standard requiring that grid frequency be kept as close to 50Hz as possible.

According to CERC, “A deviation beyond 0.05Hz would be considered alarming in developed countries, and a deviation beyond 0.1Hz would be unimaginable.

In India, we had a history of frequency varying from below 48Hz to above 52Hz, which led to innumerable grid collapses in the 1980s and 1990s."

A Mumbai-based power sector analyst, who did not wish to be identified due to the sensitive nature of the subject, said: “This is a recurring problem. Something has to be done about this as states after overdrawing power fail to make the payments on time."