TNERC also orders 10% interest payment on the delayed amount by TANGEDCO
The Tamil Nadu Generation and Distribution Company (TANGEDCO) has been directed by the Tamil Nadu State Electricity Regulatory Commission (TNERC) to pay wind generators ₹24.1 million (~$321,701) along with interest at 10% towards delayed payments for the supply of wind power. A petition received by TNERC from KBD Sugars and Distilleries Limited, D.A. Srinivas, and D.A. SathyaPrabha for 27 MW of wind projects, sought the Commission to direct TANGEDCO for payment of their dues along with interest on account of delays.
The stipulated period for recovery of dues from high-tension consumers by TANGEDCO was, they claimed, seven days as per their power purchase agreements (PPAs), and if this was not adhered to, then automatically interest would be charged on these payments. The payments were delayed by one year or more, but TANGEDCO had not included the interest due on any of these delayed payments. The petitioners explained that they have been accounting for payments received from TANGEDCO towards interest due first and then the remainder towards energy dues, the cumulative dues payable by TANGEDCO after these adjustments being around ₹24.1 million (~$321,701), with petitioners also claiming ₹148,062 (~$1,978) in court fees. The petitioners had filed a memo accepting TANGEDCO’s proposal to pay interest at 6% if the dues were paid within 60 days from the date of the invoice, and 10% otherwise. TANGEDCO however had failed to make these payments in full.
“We have no manner of doubt on the question of entitlement of interest on the part of the petitioner for the delay in settlement. However, the rate at which the interest is payable by the respondent to the petitioner for the late payment of invoice amount remains to be settled”,
The Commission said, after analyzing the submissions of all the parties involved, citing a previous order issued by the Supreme Court of India wherein a 10% interest rate was prescribed for delayed payments since there were no provisions in the PPA, and said that this rate was applied to these cases as well, It explained that since payments were not made within 60 days, it was clear that an interest rate of 10% on the dues would apply, subsequently directing TANGEDCO to rework its calculations for the amount due based on the prescribed 10% interest rate on the delayed payments and to settle its dues, which included both the principal amount due towards energy supplied and the interest payable due to delays after deducting any previously made payments, with the petitioners.
TANGEDCO was directed by the Commission to make these payments within three months from the date of the issue of its order, adding that there would be no order concerning the legal costs incurred by the petitioners.
The TNERC had recently also directed TANGEDCO to pay ₹74.8 million (~$998,885) to six wind power generators in interest due towards delayed payments for supplied power. MERCOM had previously reported that payment delays were again becoming a problem for solar and wind project developers in India, especially in Andhra Pradesh, Tamil Nadu, and Telangana. Some instances in Madhya Pradesh and a DISCOM in Karnataka are also being blamed for long payment delays to developers.
