Electrifying Reforms

The recent debarment of some discoms from electricity trading has put the spotlight back on key reforms required in the power sector

BY MANISH PANT

IN AN UNPRECEDENTED move, the Power System Operation Corp. (POSOCO) has barred 27 power distribution companies (discoms) from buying electricity from power exchanges to meet their short-term requirements. In a letter to the exchanges on August 19, POSOCO invoked the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, after utilities in 13 states failed to clear ₹5,085 crore in dues owed to the electricity generating companies (gencos). “Thereafter, 11 states have paid. Discoms of two states are still cut off from the exchanges. And if they don’t pay up, their long-term access will get reduced by 10 per cent every month,” Power Minister R.K. Singh told BT recently. Experts feel the move will force discoms to exercise better fiscal discipline. “The surcharge rule is aimed at bringing financial discipline in…

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Business Today (Digital) - 1 Issue, 18 September 2022

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