CERC proposes stiffer penalty on discoms for overdrawal

The penalty on power distribution companies (discoms) breaching grid security by overdrawing is being sought to be made heavier.

According to draft regulations, discoms would have to pay an additional 20 per cent unscheduled interchange (UI) charge, with a stricter measurement of the frequency in this regard.

The earlier revision was made in April 2010 by the Central Electricity Regulatory Commission (CERC). The new regulations are proposed to take effect early next month.

Jayant Deo, earlier with the Maharashtra Electricity Regulatory Commission, told Business Standard this was a move in the right direction. "India has to achieve global standards for power systems. However, it must be seen that all available generating capacity be despatched and only then should load-shedding be permitted. Extensive load-shedding, free use of diesel generators and no despatch of reasonably priced power are indicators of a serious malady in the power systemm," he said.

Power sector expert D Radhakrishna said the imposition of additional UI charges for discoms would hurt them financially and lead to further load-shedding. "This is another shock to distribution companies, as CERC has proposed 20 per cent additional UI charges if the grid frequency is 49.5 to 49.7, which is recurring. No discom can afford to pay Rs 9 plus additional UI charges for the power they sell at Rs 4. Most of the deficit states will have a tough time."

Ajoy Mehta, managing director, Maharashtra State Electricity Distribution Company, said: "The UI mechanism should be a deterrent to overdrawal and indiscipline."

R V Shahi, former Union power secretary, said the draft amendment was aimed at improving the system. "The habit of state utilities trying to stand in the way of improvement should be resisted," he added.