PTC gets green signal to supply direct power to small units

Power trading companies maybe headed for a recharge. With ailing state electricity boards failing to pay for their power purchases, the government has given the green signal to power trading companies to supply electricity directly to smaller industrial units. And this is adding the much needed filip to their otherwise flat trading volumes, reports Sumit Jha of CNBC-TV18.

Sick discoms are rendering the Rs 20,000-crore power trading industry powerless. Power trading companies, which sell electricity in the open market, are seeing their trading volumes plateau as discoms fail t o purchase power due to lack of funds.

Power Trading Corporation (PTC), which controls over 40% of the market, has seen its trading volumes remain flat at 24,000 million units last fiscal. As it stopped supplying to up and Tamil Nadu State Electricity Boards due to non-payment of dues.

Besides PTC India, NTPC Vidyut Vyapar Nigam, National Energy Trading and Services, Tata Power trading company and Reliance Energy trading have all been affected.

So, with their primary markets declining, power trading companies may have found a way out with the power and law ministries giving their nod to industrial units with load factor of 1 MW & above to purchase electricity at a negotiated cost from any source under the open access provision in the Electricity Act 2003.

Not only does this make provisions for assured and possibly cheaper electricity supply to power-starved industrial units, it also helps power trading companies to shore up volume.

Tantra Narayan Thakur, CMD, PTC India, says that "if somebody wants to buy power from outside I dont think they can afford not to allow and that is why and that is why you are saying that through the open access the volumes are growing and that’s a trend that will catch up and I am sure that is going to be good business."
 
Infact, PTC has already started supplying 100 MW to such units through its retail arm PTC Retail.

And there's more hope for the road ahead for these power trading companies with a financial restructuring plan for sick discoms on the anvil, the situation could ease in their primary market as well.