Center warns states against selling electricity at high prices on exchanges

New Delhi: The Union Energy Ministry has warned the state power utility to take stern action against state power utilities if they sell electricity on exchanges to take advantage of the current skyrocketing power prices. The power generation companies at the Center will take steps to cut off power supply to such states, the power ministry said.

Coal stocks at some power plants are at very low levels as a result of the sharp rise in global fuel prices, which has led to the risk of massive outages in many parts of the country.

Some states are selling electricity at higher prices on energy exchanges by applying load shedding instead of supplying electricity to their consumers, a statement from the power ministry said. However, no further details were given in the statement.

If a state does not supply electricity to its consumers and sells electricity at high rates on power exchanges, the unallocated power supply of such states will be withdrawn and it will be supplied to other needy states, the statement said.

NTPC Ltd., Damodar Valley Corp. Such ventures are owned by the central government and enterprises enter into long-term contracts with power distribution companies to sell most of the power they produce.

If any state has surplus power, it will have to report it to the central government and the center will provide this power to the needy states, the power ministry said. The government's warning came after the states complained that electricity prices had gone up on exchanges.