The Centre on Thursday barred 27 distribution companies (discoms) across 13 states from buying or selling electricity in power exchanges citing their non-payment of dues to generation companies (gencos). The affected states said the move could lead to power outages , even as some immediately started clearing their outstanding amounts to avoid a power crisis.
The restriction came into effect from Thursday evening and delivery of power will be stopped from Friday. Late on Thursday, six of the 13 states were allowed to trade in power exchanges after they claimed no outstanding dues.
A power exchange is an electronic platform on which power is bought and sold by distribution companies so as to determine the right market price and the best consumer/seller. It ensures market transparency and also helps utilities procure power to meet spikes in demand.
