Breaking: Himachal ends power banking to neighbouring states; Punjab, Haryana among states affected
Winter Power Costs Likely to Surge
Shashi Bhushan Purohit
Shimla (Himachal Pradesh), May 22, 2026: In a major policy shift, Himachal Pradesh State Electricity Board Limited (HPSEBL) has stopped supplying electricity to neighbouring states under the long-running “power banking” system after the state government decided not to provide 1,800 million units of power to the Board.
The move comes after the Government of Himachal Pradesh chose to sell its share of electricity in the open market to generate higher revenue instead of supplying it to the Board at subsidised rates.
For years, the Himachal government supplied its electricity share to the Board at around ₹3.50 per unit. HPSEBL would then provide surplus summer power to states like Punjab, Haryana, Uttarakhand, Delhi and others under a banking arrangement, retrieving the same amount during winters when demand increased and hydropower production declined.
With the government discontinuing cheap power supply to the Board, HPSEBL has now put an end to the banking system.
Under electricity banking, a state with surplus power supplies electricity to another state during periods of excess production and later receives the same quantity back when needed.
Hydropower-rich Himachal Pradesh benefited significantly from this model for years, especially because electricity generation rises sharply during summers due to snowmelt and increased water flow in hydroelectric projects.
Officials said rising temperatures and melting snow have increased water availability in hydropower projects across the state. Himachal is currently generating nearly 400 lakh units of electricity daily.
However, experts warn that ending the banking arrangement could create challenges during winter months, particularly from November to February, when water levels fall and hydropower generation drops sharply.
Energy experts believe the decision could force HPSEBL to purchase electricity from the open market at significantly higher rates during winters, increasing the financial burden on the Board.
The development is expected to impact regional power-sharing dynamics across northern states that have long depended on Himachal’s seasonal surplus electricity.