Let CEOs pay for grid failure from 'own pockets', power ministry tells panel

Power ministryOverdrawal of power by state utilities, well beyond their specified allocations, has been a consistent problem for the country’s grid managers.

The power ministry has proposed that in case of a grid failure, the CEO of the company at fault should be made to pay "from his own pocket". The ministry reckons that levying penalty on the defaulting state distribution utility does not help and personal liability is the only way to ensure that incidents like the grid failure last July are not repeated.

Related: Power grid fails again; blackout blankets half of India

"If penalty is imposed on the head of the organisation in the individual capacity for recovery from his own pocket, it is expected to make the difference," the power ministry said in a proposal submitted to a parliamentary panel.

Related: For recent failures in grids, central power regulator fines state officers

"As regards realisation of the financial penalties if not paid, section 170 of the (Electricity) Act already has provision for recovery of the penalty in the same manner as recovery of arrears of land revenue. This section also needs revisit as it is also not easily implementable," said the ministry.

The ministry submitted that many times, the commercial penalty and other monetary measures do not serve the purpose of sufficient deterrent against grid indiscipline and in these cases, physical measures of reducing or even stopping supply to the defaulting utility need to be resorted to.

Related: Grids failure hits power supply in states

Overdrawal of power by state utilities, well beyond their specified allocations, has been a consistent problem for the country's grid managers and was the key reason behind the grid collapse on two successive days last July, disrupting supplies to 20 states. A measure of the indifference of states to the penal provisions can be gauged from the fact that since 2005, 46 cases of indiscipline were reported, of which penalties were imposed in 24 cases. But state utilities paid penalties in only 17 cases.

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