Discom Dues To Power Producers Jump 36% In July

Money that power distributors own to generating companies continue to rise, reflecting stress in the sector.

Power producers' total outstanding dues owed by distribution firms more than 36% year-on-year to Rs 1.29 lakh crore in July 2020, according to Praapti portal. Distribution companies owed Rs 94,704 crore a year earlier.

The portal was launched in May 2018 to bring in transparency in power purchase transactions between the generators and discoms.

In July 2020, the total overdue amount, which was not cleared even after 60 days of grace period offered by generators, stood at Rs 1,16,817 crore, as against Rs 75,411 crore in the year-ago period.

According to the latest data on the portal, total outstanding dues in July decreased over the previous month. In June 2020, total outstanding dues of discoms stood at Rs 1,30,118 crore. However, the overdue amount in July 2020 has increased from Rs 1,15,623 crore in June 2020.

Power producers give discoms 60 days for paying bills for the supply of electricity. After that, outstanding dues become overdue and generators charge penal interest on that in most cases.

In order to give relief to power generation companies, the central government enforced a payment security mechanism from Aug. 1, 2019. Under this mechanism, discoms are required to open letters of credit for getting power supply.

The central government had also given some breathers to discoms for paying dues to power generating firms in view of Covid-19-induced lockdown. The government had also waived the penal charges for late payment of dues in the directive.

In May, the government announced Rs 90,000 crore liquidity infusion for discoms under which these utilities would get loan at economical rates from Power Finance Corporation Ltd. and REC Ltd. This was an initiative of the government to help gencos to remain afloat.

The liquidity infusion package is set to increase to Rs 1.2 lakh crore by this month end. The Ministry of Power has already given direction in this regard to the PFC and REC. Now the boards of the two state run non-banking finance firms would have to approve hike in the package.

Discoms in Rajasthan, Uttar Pradesh, Jammu & Kashmir, Telangana, Andhra Pradesh, Karnataka and Tamil Nadu account for the major portion of dues to power gencos, data showed.

Overdues of independent power producers amount to 33.78% of the total overdue of Rs 1,29,490 crore of discoms in July. The proportion of central PSU gencos in the overdue was 35.66%.

Among the central public sector power generators, NTPC alone has an overdue amount of Rs 18,404.85 crore on discoms, followed by NLC India at Rs 6,188.52 crore, Damodar Valley Corporation at Rs 5,591.15 crore, NHPC at Rs 3,195.59 crore and THDC India at Rs 1,896.14 crore.

Among private generators, discoms owe the highest overdue of Rs 20,010.20 crore to Adani Power followed by Bajaj Group-owned Lalitpur Power Generation Company Ltd at Rs 4,160.28 crore, SEMB (Sembcorp) Rs 1,793.38 crore and GMR at Rs 1,930.16 crore.

The overdue of non-conventional energy producers like solar and wind stood at Rs 10,302.34 crore in July.

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