CERC To Squeeze Overdrawn Power Dues From JK Plan Funds

Imposes Rs 1 Lakh Penalty On PDD Principal Secretary

SRINAGAR (ONS)  – Rejecting Jammu and Kashmir government’s plea liquidate the unscheduled interchanges (UI) power dues of Rs 427.35 crore in five years, the Central Electricity Regulatory Commission has directed it to clear the outstanding by this month end failing which the Union Finance Ministry has been asked to make it good from the central plan assistance for the state.

In a 4-page order issued in New Delhi on November 5, 2012, in its suo moto petition No 40/2012, the CERC also imposed a penalty of Rs one lakh on the principal secretary, J&K Power Development Department, Sudhanshu Pandey, for his failure to comply with the earlier order. He has been directed to deposit the penalty amount within one month from the date of issue of the order.

The Commission had heard the case titled “Default in payment of Unscheduled Interchanges (UI) charges for the energy drawn in excess of the drawn schedule by PDD, J&K” on September 27, 2012. In the latest order, it referred to its July 23, 2012 order in which it had observed that UI was a pool account and the states overdrawing from the grid in deviation of their schedule were required to pay at the prescribed UI rates to the UI pool account and the states under-drawing from the grid or the generators which had been injecting into the grid would get the payment from the UI pool account at the prescribed rate.

It said the default in payment by any state defeated the self-regulating mechanism of UI, directing the state government to liquidate the outstanding dues along with interest “at the earliest.” The CERC had asked the PDD principal secretary to file on affidavit the payment plan to liquidate the outstanding by August 3, 2012. However, on September 6, the department sought four weeks time to file the plan.

On September 11, the CERC asked the PDD to liquidate the dues by 25^th of the month failing which its principal secretary would be liable to a “personal penalty” for noncompliance of its orders. In its affidavit on September 24, the government said it had paid Rs 29.50 crore each in June and July (total Rs 59 crore) out of Rs 637.185 crore and sought permission to pay the balance of Rs 178.185 crore along with interest in the next five years. The plea was based on the state Finance Department’s inability to earmark “such a huge amount in a short span conveyed in its letter of September 18.

The Commission noted that during the hearing on July 23, the PDD had said the state government had taken the matter “very seriously” and asked all technical officers manning SLDCs not to resort to over-drawal from the grid. However, the CERC said the outstanding dues payable by the J&K PDD were receivable by other constituent states. Because of this, it said, the Commission could not permit the default by state PDD at the cost of interest of other states.

Accordingly, the CERC directed the J&K PDD to deposit the entire outstanding of Rs 427.35 crore with surcharge as on September 25, 2012 as per the information received from the Northern Regional Load Dispatch Centre in the NRUI pool account by 30^th November, 2012, besides imposing a penalty of Rs one lakh on the principal secretary, PDD. In the event of the state government’s failure to pay the outstanding UI dues by the date, it directed the finance secretary, government of India, to recover the amount from the central plan assistance to the state.

Apart from the CERC chairman, Dr Pramod Deo, the order has been signed by three members, S Jayaraman, V S Verma and M Deena Dayalan.  

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