CERC directs JKPLC to clear Rs 116.97 crore DSM dues, open LC

The Central Electricity Regulatory Commission (CERC) has directed Jammu & Kashmir Power Corporation Limited (JKPLC) to clear outstanding Deviation Settlement Mechanism (DSM) dues of about Rs 116.97 crore and to open a Letter of Credit (LC) to secure future payments. The order underscores the need for financial discipline to maintain grid reliability.

In its April 10, 2026 order in Petition No. 547/MP/2025, the Commission disposed of a petition filed by the Northern Regional Load Despatch Centre (NRLDC), which flagged persistent payment defaults by JKPLC.

NRLDC stated that JKPLC had stopped contributing to the Northern Regional Deviation Pool Account after February 2024. The outstanding DSM principal stood at about Rs 114.06 crore as of February 28, 2025. In addition, unpaid legacy dues and Pool Deficit Recovery Charges exceeded Rs 44 crore under the DSM Regulations, 2024.

The grid operator submitted that continued non-payment was creating a deficit in the pool account, affecting timely payments to generators and ancillary service providers and weakening the financial framework supporting grid operations.

JKPLC acknowledged the dues and cited financial constraints, noting dependence on budgetary support from the Union Territory administration. It informed the Commission of a partial payment of Rs 30 crore made in September 2025 and sought six months to clear the balance.

CERC held that DSM charges are statutory obligations with high priority. It directed JKPLC to clear all outstanding amounts, including interest and surcharge, without further extensions. The utility has been asked to submit a month-wise payment plan to NRLDC and ensure timely settlement of all future DSM liabilities.

The Commission also directed JKPLC to open an LC in line with Regulation 10(2) of the DSM Regulations, 2024, equivalent to 110% of its average weekly liability, given its payment history.

CERC declined NRLDC’s request to allow Load Despatch Centres to regulate or deny network access to defaulting entities, stating that such powers would require amendments to the regulatory framework and were beyond the scope of the current proceedings.

The order was issued by a bench comprising Jishnu Barua and Members Ramesh Babu V., Harish Dudani, and Ravinder Singh Dhillon.

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