Officials of states overdrawing power to face personal penalties

New Delhi: India’s apex power sector regulator plans to impose penalties on chief executive officers (CEOs) of power distributors that withdraw more than their allotted share of electricity.

While there is a penalty for overdrawing power from the transmission grid known as an unscheduled interchange (UI), states prefer to pay this because it’s cheaper to do so than to buy power in the spot market. Besides, it’s imposed on utilities and not on officials.

The Central Electricity Regulatory Commission (CERC) now plans to change this. It has summoned the CEOs of the power distribution companies of Delhi, Uttar Pradesh, Punjab, Haryana, Rajasthan, Himachal Pradesh and Jammu and Kashmir.

The drastic step comes in the backdrop of India’s recent power transmission failures. On 31 July, the northern grid collapsed, and on 1 August, in a wider blackout, the northern and eastern ones did so, leaving nearly 620 million people without electricity.

“We have called a meeting of the CEOs tomorrow. Imposing a penalty of Rs.1 lakh or Rs.1 crore means nothing for the utilities. We now plan to impose personal penalties on officials who head these overdrawing utilities. It will be a personal fine on them,” said Pramod Deo, CERC chairman.


The CERC plans to impose penalties on CEOs of power distributors that withdraw more than their allotted share of electricity. Photo: Hemant Mishra/Mint


The CEOs have been called over a petition filed by the Northern Regional Load Despatch Centre (NRLDC) with CERC against the state power utilities and load despatch centres of Delhi, Uttar Pradesh, Punjab, Haryana, Rajasthan, Himachal Pradesh and Jammu and Kashmir. The power overdrawn by these states is in the range of 3-51% of the scheduled quota. Overdrawing by Uttar Pradesh has been as high as 43.32 million units (MU) per day. For Haryana and Punjab, this touched 27.83 MU and 18.33 MU per day, respectively, in the month of June 2012.


NRLDC is responsible for maintaining grid discipline and supervising optimum scheduling and despatch of electricity in the northern region. Apart from overdrawing power, states also owe money on account of UI charges to generation firms such as NTPC Ltd. Uttar Pradesh alone owes around Rs.1,000 crore on account of such charges.

Standard and Poor’s (S&P) said in 8 August report, “Standard and Poor’s Ratings Services believes that a power failure of such magnitude underscores the shortage of investment in India’s power sector… The blackout was, in our view, a consequence of capacity and infrastructure that severely lag the country’s mushrooming demand. While India’s installed electricity capacity is growing and its generation, transmission, and distribution infrastructure has improved, particularly at the state level, they have yet to catch up with the country’s need for electricity.”

A grid collapse is the worst-case scenario for any transmission utility; if this happens, states that draw power from that particular network go without power. India has five regional grids—northern, southern, eastern, north-eastern and western. All except the southern one are connected.

Regional Load Despatch Centres (RLDCs), which fall under the purview of state owned Power Grid Corp. of India Ltd, are responsible for maintaining grid discipline, and supervising optimum scheduling and delivery of electricity in their regions. The country has 33 state load despatch centres, five RLDCs, and one national load despatch centre.

“We believe India’s government isn’t placing enough focus on improving the country’s inadequate transmission and distribution infrastructure, particularly at the state level, despite the large increase in installed power capacity,” S&P said. “We note that the current transmission grids and distribution infrastructure have been operational for a long time. While the recent outage was the only reported mass blackout in the past 10 years, the stability of the transmission has been managed through rotating power cuts–a less than optimal solution, in our opinion.”


Amit Antil

After doing Power Management (MBA) from National Power Training Institute (NPTI), Amit Antil is now presently working with Today Green Energy Pvt. Ltd. and looking after business development activities for Solar. Earlier he was associated with leading power trading company Global Energy for 3 years. He has a sound knowledge about bidding, power trading, open access, REC trading, Govt. Liaisoning, Contract Negotiation, Power Purchase Agreement.

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