Power crisis: AIPEF seeks price cap to stop black marketing of power on energy exchange

• The AIPEF has demanded that an expert committee with a CEA member should be constituted immediately to enquire into the coal shortage resulting in power crisis in India
• In view of the spike in energy rates due to a shortage of coal, it is necessary for state regulators as well as CERC to intervene and impose price caps, said the AIPEF

New Delhi: The All India Power Engineers' Federation (AIPEF) has demanded a meeting of the Forum of Regulators immediately and the imposition of a price cap to stop black marketing of power on the energy exchange, mostly by private operators, as India reels under a power crisis. In a letter addressed to Union Minister for Power RK Singh, the AIPEF has also demanded that an expert committee be constituted to fix the responsibility for the coal crisis and to evolve ways and means to avoid such crises in the future.

"The subject of putting a cap on profiteering by IPPs may be discussed and finalised in the Forum of Regulators in the letter and spirit of Section 62(1)a of Electricity Act, 2003, immediately, at topmost priority, to stop black marketing in energy exchange, mostly by private operators, during the crisis," AIPEF Chairman Shailendra Dubey said in the letter.

'Expert committee should enquire into power crisis'

Pointing out that coal shortage has been recognised as a major factor that has caused a hike in power rates and the ensuing crisis, the AIPEF Chairman urged the Power Ministry to take steps for averting future coal shortages. "In particular, we refer to an interview by the then Coal Secretary in 2016 (Anil Swarup), who stated that in 2016, he had finalised an action plan for the next five years for meeting coal shortages. However, this action plan was not implemented and now the Coal Secretary has retired and it is up to the end user… ie, the Ministry of Power… to take up the issue of coal shortage with the concerned ministries so that the crisis of 2021 does not repeat itself," said Dubey in the letter. 

The AIPEF has demanded that an expert committee with a CEA member should be constituted immediately to enquire into the coal shortage resulting in power crisis in India. "… so that the reason for the present crisis is technically analysed and accordingly stern action is taken against those responsible for the crisis," said the letter.

'Regulators need to step in & impose price caps'

The AIPEF also told the Power Ministry that in view of the spike in energy rates due to a shortage of coal, it is necessary for state regulators as well as CERC to intervene and impose price caps to prevent excessive profiteering by independent power producers (IPPs) and also to ensure that unbearable burden is not put on consumers of discoms. "Discoms are constrained to purchase high-cost power in order to limit power cuts. This leads to a deterioration in finances of discoms, which are already stressed. From this angle as well, price caps on merchant power plants are required and the present instances of exploiting shortage by raising the rate to the range of Rs 20 per unit in energy exchange must not be allowed. As per Section 62 (1)a of Electricity Act, 2003, it becomes the duty of the Regulator to impose price caps," said the letter.

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