Telangana HC clears way for discoms to buy electricity

Hyderabad: The Telangana High Court directed the Centre and electricity bodies not to prevent the Telangana power distribution companies (discoms) to operate through the power exchange as well as secure power through open access if there is default of payments.

The direction was issued by Justice Radha Rani of the Telangana High Court to the Union ministry of power, the Union ministry of new and renewable energy, Power System Operation Corpor-ation and National Load Despatch Centre.

The direction came on a petition filed by the Telangana State Southern Power Distribution Company Ltd and Northern Power Distribution Company Ltd, which challenged the proceeding issued in 2021 by the Union power ministry.

The court also issued a stay on the proceedings.

The proceedings said that in the event of non-maintenance of letters of credit by the discoms, they could not be provided electricity from generators. In 2021, the Union power ministry made the clause mandatory for all power purchase agreements (PPA). If any discom defaulted on payment, it could not secure power via open access. The two discoms of Telangana had made 181 PPAs with private and government power generators.

The discoms defaulted on payments, which resulted in their access to electricity being restricted.

The discoms then approached the High Court against the requirement.