"The power ministry took this decision following rising concerns over the present trend of trading power by many states, particularly from the central public sector units' quota, which has pushed up the cost of power," officials told Business Standard.
Power surplus states have been found to have drawn their quota from central power generation companies, and later sold them to trading companies at a premium.
Power deficit states, in turn, buy power from trading companies. This leads to a situation where the price per unit of power climbs to an unsustainable level in deficit states.
The decision to disallow power trading was taken at a meeting held between the power ministry and representatives of various states for allocation of power from the proposed ultra mega power projects.
However, in case of payment default by allottee states, the developers have the right to sell power to distribution companies or high-tension consumers.
The highest requisition for power, of 5,500 mw, from these projects came from Maharashtra, while the lowest requisition of 200 mw each was made by Uttaranchal and Kerala.
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