NTPC may cut power to 3 southern states over non-payment; UP next in list

Telangana, Karnataka, Andhra Pradesh may face power cut from 9 February

Electricity shortages loom over five states at a time when the respective governments would like to ensure a round-the-clock supply in the election season. 

NTPC has issued notices to Telangana, Karnataka and Andhra Pradesh for “regulating power supply” from February 9 owing to non-payment of outstanding dues for more than two months. All these states are governed by non-BJP parties. 

NTPC has outstanding dues of Rs 7,859 crore, of which Jammu and Kashmir (J&K), Uttar Pradesh, Telangana, Karnataka, and Andhra Pradesh account for the most, said executives of the state-run power company. The three Southern states, which together owe Rs 5,837 crore to NTPC, have not made any payment for over two months now — the maximum period of default. 

UP is also delaying its payment, but has not defaulted yet.  

At Rs 6,127 crore, UP currently has the highest outstanding dues to several power suppliers, including NTPC, the ministry of power’s PRAAPTI data portal revealed. There are worse states – Rajasthan with Rs 2,404 crore and Punjab with Rs 1,041 crore dues over 500 days. 

The notices, issued by NTPC under the CERC (Regulation of power supply) Regulations, 2010, state, “In case of the outstanding dues or in case the required letter of credit or any other agreed payment security mechanism is not maintained as per the agreement, the generating company may serve a notice for regulation of power supply, on the defaulting entity, for reducing the drawl schedule.”

NTPC, while issuing the notices to these states, has said it would regulate power to these states from February 9 onwards. The initial regulation would for three months or till the clearing of the dues, said the notice. Business Standard has reviewed the notices.

This comes at a time when the country prepares for general election due in next two months. Round the clock power supply is a necessity during election time. Most states, however, are unable to pay for electricity because of their dire financial state.

During H1FY19, several power distribution companies have gone back in red, even after implementing the reform scheme for — UDAY. Telangana had loss to the tune of Rs 8,904 crore, Karnataka Rs 804 crore. Uttar Pradesh had the highest losses — Rs 30,943 crore.

Officials said UP could be the next to see regulation of power supply. The state has the highest outstanding dues to several power suppliers including NTPC. The total outstanding of UP stands at Rs 6,127 crore, as per the PRAAPTI data portal of ministry of power. There are worse states — Rajasthan with Rs 2404 crore, Punjab with Rs 1,041 crore due over 500 days.

NTPC at the same time has also issued notice as it will regulate power supply to some states, there will be surplus power available with it. This, it said, other states can avail.