CERC directs J&K Govt to clear power dues worth Rs 600 crores

CERC directs J&K Govt to clear power dues worth Rs 600 crores

25 July 2012
The Daily Excelsior
Neeraj Rohmetra

Jammu: In a decision of serious financial implications, the Central Electricity Regulatory Commission (CERC) has directed the Jammu and Kashmir Government to liquidate its outstanding power dues worth nearly Rs 640 crores. Further, the Commission directed the Government to file an affidavit before it on the next date of hearing elaborating the modus operandi to be adopted by the State to liquidate the outstanding (Unscheduled Interchange) UI charges dues along with interest. It has also turned down the plea of PDD officials to pay the entire amount in 10 monthly-equated installments. These directions have been issued by the CERC while hearing the matter of default in payment of Unscheduled Interchanges charges for the energy drawn in excess of the schedule by Power Development Department. Expressing concern over the decisions of the Commission, Finance Minister Abdul Rahim Rather said, 'the decision has great financial implications and we have to somehow arrange all the required funds'. 'Unfortunately, we have inherited these charges from the previous Government and they had not made sufficient efforts to clear these dues. While around Rs 300 crores are nearly the UI charges, there is also penalty worth nearly another Rs 300 crores', he said adding, 'we shall try to again plead before the Commission to pay the money in installments since we have meager resources. If they donít agree, then we shall have no choice to pay the entire amount'. 'We have to pay a heavy price to draw extra power from the Northern Grid. While the average rate is nearly Rs 1 per unit, for overdrawn power we have to pay the prices of nearly Rs 17 per unit', he said. The State Government had urged the Commission to permit the Power Development Department to pay the entire amount of outstanding UI dues along with interest during the current financial year in 10 monthly installments. While dismissing the pleas of State Government, the Commission remarked that UI is a pool account. The States over-drawing from the grid in deviation of their schedule are required to pay at the prescribed UI rate to the UI pool account and the States under-drawing from the grid or the generators, which have been injecting into the grid shall get payments from the pool account at the prescribed rate. 'Therefore, default in payment by any State defeats the self-regulating mechanism of the UI. The request of State officials for payment in installments will result in accumulation of interest and additional burden on the State. It is, therefore, in the interest of Power Development Department of State to liquidate the outstanding dues along with interest at the earliest. We therefore, direct the State officials to file an affidavit that payment plan to liquidate the outstanding UI dues along with interest by next date of hearing,' the order said. It added, 'we make it clear that the current UI charges shall be liquidated as and when it arises' The Commission stated that the over-drawl from the grid is not the solution to meet the long-term requirement of the power of the State. 'The State required higher quality of power during the winter season. Dependence on over-drawl from the grid to meet the requirement of power would not only add financial burden on the State to liquidate the UI dues and accumulated interest, it would also endanger the safety, security and reliability of the Northern Regional Grid'. 'Therefore, in the interest of the grid and the consumer of the State, we would expect the State Government go for planned power purchase on long term and medium term basis to meet the consumers load'. Earlier, the PDD officials had submitted before the Commission that the issue of over dues had been taken very seriously by the State Government and directions had also been issued to all the technical officials manning the (State Load Despatch Centre) SLDC not to resort to over-drawl from the grid.