The total outstanding dues owed by distribution firms to power producers increased by more than 47 per cent year-on-year to Rs 1.33 lakh crore in June 2020, reflecting stress in the sector. In June 2019, distribution companies (discoms) owed a total of Rs 90,655 crore to power generation firms, according to the PRAA (Payment Ratification and Analysis in Power Procurement for bringing transparency in invoicing of generators) database.
The portal was launched in May 2018 to bring transparency between the generators and discoms in power purchase transactions.
In June 2020, the total overdue amount, which was not cleared even after the generators gave 60 days of grace period, stood at Rs 1,20,041 crore, as opposed to Rs 72,362 crore in the year-ago period. Total unpaid dues in June have risen over the previous month, according to the portal’s latest data. Total discom dues in May 2020 stood at Rs 1,26,963 crore. The overdue sum increased from Rs 1,13,869 crore in May 2020 as well in June 2020.
Power producers give the discoms 60 days for paying electricity supply bills. After that, outstanding dues become overdue and in most cases generators charge penal interest on it.
As of 1 August 2019, the Center introduced a payment protection system to provide relief to power generation companies (gencos). Under this mechanism, discoms are required to open credit letters to get electricity supply.
In the light of the COVID-19-induced lockdown, the central government had given some breathers to discoms for paying dues to power generating companies (gencos). The government had also waived the penal charges for late payment of dues.
In May, Power Finance Corporation and REC Ltd announced Rs 90,000 crore liquidity injection for discoms under which these utilities will get loans at economic rates. It was the Government’s effort to help gencos remain afloat.
The government is reportedly in the process of raising the package for liquidity infusion to Rs 1.25 lakh crore after receiving requests from some states in this respect.
The data showed that Discoms in Rajasthan, Uttar Pradesh, Jammu & Kashmir, Telangana, Andhra Pradesh , Karnataka and Tamil Nadu account for the biggest portion of power gencos dues.
Independent power producers’ overdue amounts to 34.78 per cent of June ‘s cumulative overdue Rs 1,20,041 disk crore. The extraordinarily high proportion of central PSU gencos was 36.58 percent.
NTPC alone has an overdue sum of Rs 19,298.77 crore on discoms, followed by NLC India on Rs 6,280.76 crore, Damodar Valley Corporation on Rs 5,570.99 crore, NHPC on Rs 3,518.97 crore and THDC India on Rs 2,551.32 crore, among central public sector power generators.
Discoms owe the highest overdue of Rs 22,319.41 to Adani Power among private generators, followed by Bajaj Group-owned Lalitpur Power Generation Company Ltd at Rs 3,884.91 crore, SEMB (Sembcorp) Rs 2,210.22 crore and GMR at Rs 1,930.16 crore.
In June the overdue of renewable energy producers such as solar and wind stood at Rs 10,111.33 crore.
