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(Briefing Paper No.3/2007)
Penalty fails to curb power overdrawal
The Hindu Business Line, Monday, September 01, 2008
Amid a surge in short-term power costs triggered by acute shortages, State Electricity Boards (SEBs) are increasingly opting to overdraw from the grid and shell out the Rs 10 per unit maximum penalty, instead of sourcing power from more expensive liquid fuel stations. While this trend is pushing the grid to the brink of a collapse, with frequency dipping way past the danger mark on numerous occasions over the past couple of days, rampant overdrawal by States comes even as nearly 3,000 MW of naphtha and diesel-based capacities lie idle across the country.
Flagged by outages in a key thermal power station, besides lower hydro generation in the southern region and a continuing dip in nuclear generation, the cost of short-term power has shot up well into double digits across regions over the last couple of days. “With the the maximum penalty for overdrawing from the grid during low frequency condition-scapped at Rs 10 per unit by the regulator, most States prefer to overdraw from the grid and pay the penalty to buying electricity from liquid-fuel stations, which could cost between Rs 12-14 per unit,” an official involved in the exercise said.