Uttar Pradesh keeps local units out, system only for inter-state buys

The Uttar Pradesh Power Corporation (UPPCL) and its discoms are geared up to adhere to the letter of credit system for power purchases from August 1, but have kept independent power producers within the state out of the ambit of the new payment security mechanism.

Speaking to FE, a senior official of UPPCL said arrangements have been made to issue letters of credit worth Rs 2,100 crore for “inter-state power” on a weekly revolving basis, which effectively keeps both state-owned generating stations as well as private power units out of the system. The new system for providing LCs in Uttar Pradesh will, therefore, include all inter-state power that UP buys from CPSUs such as NTPC, NHPC, NPCIL, as well as Meja, which is UP’s joint venture project with NTPC, Case-I power projects, as well as solar power.