Power Ministry moots sale of unallocated power
(vinod Kumar Gupta)
Publication Date 17/7/2009
New Delhi: Union Power Ministry is examining a proposal to allow trading of power from its discretionary quota to earn additional revenue.

The central government has a discretionary quota of 15 percent of the capacity of all power stations in central sector and this power is allocated as to states as per Gadgil formula. Sometimes it gives unallocated power to those states that have a political clout.

According to sources the Power Ministry intends to sell the power through power exchanges in the country to mint more money. At present there is approximately 6000 MW power at the disposal of Power Ministry for distributing to states. This is likely to double by the end of 11th Five year plan when many central projects are likely to be completed.

The proposal is likely to be opposed by all the power deficit states since they would be paying more for same quantity of power. Further Central Electricity Regulatory commission may also object because it is the regulator who fixes tariff for these projects.

According to sources Power Ministry thinks that they would be allowed to sell at least half of discretionary quota at market rates through power exchanges to earn more revenue.