Center warns states against selling unallocated power in energy crisis

The Centre threatened states with a subtle threat by warning them to take their unallocated power. This is if it is not being used for consumer needs but instead being traded on power exchanges at higher rates of profit.

In response to several states reporting a shortage of power due a sudden increase in demand, the union power ministry directive was issued. They also sold a portion of the power they had at exchanges in order to maximize gains. Prices have risen to Rs 15 per unit of electricity.


Many states, including Tamil Nadu and Punjab, Delhi, Rajasthan and Assam, Madhya Pradesh, are experiencing severe stress in their power situations due to fuel shortages at coal-based plants. However, an unprecedented rise in power demand following the pandemic’s rapid recovery is being observed in economic activities.

According to a statement from the power ministry, it was discovered that certain States were not providing power to consumers and are imposing load shedding. They are also selling power on the power exchange at very high prices. Unallocated power must be regulated to avoid misuse.

According to the guidelines for power allocation, 15% power from the Central Generating Stations is kept under “unallocated” power which is distributed by the Central Government to the states that have the greatest need.

Distribution companies have responsibility for supplying power to consumers. They should serve consumers, who have the right of 24×7 power. According to a statement by the power ministry, distribution companies shouldn’t sell power on the power exchange or starve their customers.

Accordingly, the states were asked to use unallocated power to supply electricity to their consumers. The statement also stated that states were asked to inform the Government of India if they have surplus power so that the power can be redistributed to other states in need.

The statement also stated that if any state is found to be not serving its consumers or selling power on the power exchanges at a higher rate, their unallocated power shall be withdrawn. It will be allocated to other states in need.