Bills pending, 13 states barred from power exchanges

The Centre barred 13 states from buying or selling electricity on power exchanges until they clear their current bills from power plants, sending a clear signal that they will have to clear accumulated dues and pay regular bills on time. These states, which include some of the big ones like Maharashtra, Madhya Pradesh, Karnataka, Tamil Nadu and Rajasthan, could see large-scale power outages if they do not pay up quickly.

"The buy and sell transactions in all products of the power market for the discoms has been entirely restricted till further notice from the delivery date of August 19," a senior government official said. "The states have been warned several times to clear dues before taking the step."

These states together owe about ₹5,100 crore in current dues to power generators. Additionally, the power distribution utilities have accumulated dues of over ₹1 lakh crore, which are being settled as per a plan formulated by the Centre.


"The states have been paying past dues but not paying current dues. If either of the two dues is unpaid, power trading on exchanges will be regulated by the National Load Dispatch Centre," the official said.

This is the first time the Centre has taken recourse to this route on such a broad scale to ensure payment to power producers. Earlier, such restrictions were imposed on one or two defaulting states, and were removed quickly.

"This will be a regular feature now. It may cause some inconvenience but will bring the required discipline," the official said.

Six States Allowed to Trade Power
The other states facing the ban are Andhra Pradesh, Telangana, Chhattisgarh, Jammu & Kashmir, Bihar, Jharkhand, Manipur and Mizoram.

Officials in most of these states said they are working with the power plants to pay the dues as early as possible as mandated under the Centre's Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, notified in June. Later in the night, six states -Chhattisgarh, Maharashtra, Andhra Pradesh, Bihar, Jharkhand and Manipur - were allowed to trade electricity after they claimed no outstanding or disputed matters. The states can immediately start trading in the emergency segments of power exchanges or in the real-time market.

Earlier in the day, shares of the Indian Energy Exchange fell 3.6% to Rs 166.35 on the BSE following the Centre's order. The clearing volume on Indian Energy Exchange's day-ahead market dropped 44% for delivery on Friday to 67 million units from 120 million units on Thursday.

Peak prices fell to Rs 6.31 per unit in Thursday's trade against Rs 10.1 on Wednesday.

Under the notified rules, a one-time relaxation was given to all distribution companies (discoms), freezing the amount outstanding, including principal and late surcharge, on the date of notification of the scheme. The discoms were given the flexibility to pay the outstanding amount in up to 48 installments. The generation companies will not get any late payment surcharge on the frozen amount.