Threat of a power outage is present since defaulting states cannot exchange power


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Nearly 13 states, including Andhra Pradesh, Madhya Pradesh, Rajasthan, Tamil Nadu, and Telangana, are in danger of experiencing widespread power outages since they are prohibited from trading on power exchanges until their debts to power plants are paid in full. This is the first time that many power distribution businesses have been simultaneously prohibited from trading on exchanges. On one or two defaulting states in the past, regulations were put in place but were quickly lifted.

On Thursday, the trading hours on the electricity exchanges were increased by two hours at the request of numerous state governments. However, the majority of them were unable to take part in the day-ahead trade. A few of these states are expected to file legal challenges to the Centre’s Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, which were issued in June, according to officials in some of these states.

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