Generating cos can’t pull plug over non-payment
This has put power producers in an unenviable position and one of them, a source privy to the matter said, has approached the judiciary for remedy, although the company concerned did not confirm this to FE. On its part, the Central Electricity Regulatory Commission said the matter was yet to reach it, while the power ministry has refused to intervene. “The power ministry is not party to the PPA,” Ashok Lavasa, additional secretary in the ministry, told FE.
It is not possible for the generators to cut production and refuse to give power to errant discoms because under the relevant regulations, even if they reduce generation, the LDC would proportionately distribute power to all the allocatees.
The problem is that while the PPA does have provisions for disconnecting supply to an existing allocatee and making third-party electricity sales in the event of payment default, it does not have any explicit provision to force LDCs to disconnect power supplies even in case the generator
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