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Karnataka among 13 States barred from buying or selling electricity from spot market owing to uncleared dues

Karnataka govt. will clear pending power dues: Energy Minister V. Sunil Kumar

August 19, 2022 09:08 pm | Updated August 20, 2022 10:18 am IST - Bengaluru

Energy Minister V. Sunil Kumar on Friday said the State government would soon clear pending dues of ₹355 crore to power generators. 

Energy Minister V. Sunil Kumar on Friday said the State government would soon clear pending dues of ₹355 crore to power generators.  | Photo Credit: K Murali Kumar

Energy Minister V. Sunil Kumar on Friday said the State government would soon clear pending dues of ₹355 crore to power generators. The Union Power Ministry on Thursday barred 13 States, including Karnataka, from buying or selling electricity from the spot market for not clearing dues of ₹5,085 crore to power generators.

Mr. Kumar told The Hindu that the pending dues were a "routine matter" and the department would clear them in a few days.

The Power System Operation Corporation (POSOCO), a body of the Power Ministry, invoked the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, to bar power distribution companies (Discoms) from alternative short-term sources. Discoms of four States in the south — Andhra Pradesh, Tamil Nadu, Telangana, and Karnataka — are among those on the ban list.

The Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, which was notified this June mandates Discoms to pay a late payment surcharge (LPS) on the outstanding amount after the due date of payment.

Review PPAs

Meanwhile, “unscientific” power purchase agreements (PPAs) have come to light in the Energy Department of the State and the Minister has decided to seek a legal opinion on the matter. Many of these PPAs had been widely signed during the previous Congress government’s tenure, sources in the Energy Ministry said. Escoms have been financially burdened following “unscientific” PPAs, sources said.

The PPAs have been signed to purchase power at a rate more than the prevailing rates in the market since 2010. The department has decided to audit the accounts of the PPAs.

All managing directors of Escoms have been instructed to review the PPAs signed for the purchase of power at a price of more than ₹5 per unit. Some PPAs have been signed for a period of 25 years for the purchase of power at ₹8.5 per unit to ₹10 per unit and this caused a huge financial burden on Escoms, sources said.

Though the prevailing rate in the market for power has come down, the Escoms have been purchasing power as per the PPAs at a higher price.

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