UI dues: CERC rubbishes MPPTCL's explanations; moves into punitive mode

April 14:
New Delhi
Rubbishing the clarifications offered by Madhya Pradesh Power Trading Corporation Limited (MPPTCL) in its defense, the Central Electricity Regulatory Commission (CERC) has slapped penalties on the utility for its persistent delays in liquidating outstanding unscheduled interchanges (UI) dues towards energy drawn by the state in excess of its quota, along with accumulated surcharges for late payment. These dues were pegged at approximately Rs 1.42 crore, as of January 31, 2009, according to the Western Regional Load Despatch Centre (WRLDC).
8Earlier, the apex body had issued a show-cause notice to MPPTCL for its failure to remit payment on time. The Commission had then asked the utility to furnish explanations as to why penalty for non-compliance of the related provisions of the Indian Electricity Grid Code (IEGC) should not be imposed on it, as per Section 142 of Electricity Act, 2003. In response, MPPTCL had admitted lapse on its part, but argued that due to the then ongoing Rabi season, the state was forced to overdraw to meet the huge demand for power from its agricultural sector. Further, claiming that the state was going through a difficult time financially, the utility had also sought the approval of CERC to liquidate the amount due, including surcharges, by August 2009.
However, the Commission has rejected MPPTCL`s reasoning as inappropriate and has claimed that other states might also be going through a power shortage, and by overdrawing, MPPTCL has in all likelihood usurped some other states` legitimate share of power. A financial crunch, CERC has asserted, is not a valid excuse for not remitting payments for power drawn thus.
The Commission has now asked the utility to pay a penalty of Rs 1 lakh, under Section 142 of the Electricity Act, 2003, by April 17, 2009. In tandem, the utility has been directed to liquidate all outstanding dues by May 15, 2009. Furthermore, in line with sub-section (1) of Section 149 of the Act, CERC has also issued a show-cause notice to MPPTCL`s Managing Director, P K Vaishya, seeking his explanation, by April 30, 2009, as to why, being the person in charge of the defaulting utility, he should not be punished as well.