Despite severe cuts across north India, a staggering 50 percent of the excess power generated by the hill state of Himachal Pradesh goes abegging as poorly-managed electricity boards across the region do not have the money to purchase it.

The net result is that the excess power has to be sold in the open market at a lower profit.

"We are not finding buyers for 50 percent surplus power. The states, which were procuring electricity on a regular basis in bulk, are now opting for power cuts rather than buying electricity," Chief Secretary Sudripta Roy told IANS. Himachal Pradesh, one the country's largest hydropower producers, generates 7,913 MW, of which 810 MW is available for sale from April to October.

Officials of Himachal Pradesh State Electricity Board Ltd said that Punjab, Haryana, Delhi, Uttar Pradesh and Uttarakhand were among the regular buyers from the state till last summer. The cash-starved distribution companies of these states preferring to impose power cuts rather than procuring power. They are even reluctant to enter into long-term purchase agreements.

Surplus electricity and falling rates have virtually left the hill state commercially powerless.

"The electricity can't be stored. It has to be used otherwise it will go waste. Since there is no regular buyer, we have been forced to sell it in the open market through the national power exchange at low margins," the chief secretary said.

The profit, which was around Rs.3 per unit till last year, has come down to just 18 paise this year, he said.

Last year the electricity board was selling power up to the maximum price of Rs.7.50 per unit whereas this year it's around Rs.3.75 per unit.

Roy said last year the state sold power in bulk at Rs 4.30 per unit to Uttar Pradesh but it failed to pay about Rs.180 crore. "We have decided in principle not to supply power to Uttar Pradesh till it clears the dues."

Facing a huge power shortage, Uttar Pradesh Monday ordered the shutting down of malls, commercial establishments and shops at 7 p.m. every day for 15 days. Folowing huge protests, the order was rescinded a day later.

Hydro-electric power generation in the state increases in summer, but comes down to just 20 percent of the capacity during winter (November-March).

Himachal Pradesh has abundant water resources with a power generation potential of about 23,560 MW. About 7,913 MW have been harnessed till nowby the central and state governments, private players and joint venture companies.

Besides tourism and horticulture, hydropower is a major source of revenuefor the state.
From Rs.29.60 crore in 2003-04, the revenue from electricity rose to a whopping Rs.1,255 crore in 2008-09. However, profits have come down from Rs.1,150 crore in 2010-11 to Rs.1,050 crore in 2011-12.

On the flip side, the chief secretary said Rajasthan and Karnataka have, for the first time, agreed to buy electricity from Himachal Pradesh.

"Karnataka has even shown interest in entering a long-term purchase agreement with us," Roy added.