Dicoms owed dues to Gencos surged to INR 1.38 lakh crore in Sep 2020
Stress in the power sector continues as the distribution companies (discoms) total dues owed to power producer’s increases in September 2020.
The total dues of discoms have increased to INR 1, 38,479 crores in September 2020, registering an escalation of more than 28 percent year-on-year basis.
While in September 2019, the total dues owed to power generation firms by (discoms) was INR 1, 07,930 crores, as per the PRAA (Payment Ratification And Analysis) portal.
In May 2018, the PRAA portal was launched to create transparency on the transactions of power purchase between generators and discoms.
In September 2020, the total overdue number, which was not cleared even after 45 days of the grace period provided by generators, stood at INR 1,26,661 crore, as against INR 85,790 crore during the same period – a year ago.
Power producers give discoms 45 days to pay bills for electricity supply. After that, arrears become overdue and generators charge punitive interest on them in most cases.
The latest data from the portal shows that the total outstanding dues have has also exhibited escalation in September on a month-on-month basis. In August 2020, the total outstanding debt of discoms amounted to INR 1,34,928 crore.
The month-on-month basis increase was also witnessed in the overdue amount in September 2020 – where the overdue amount has risen to INR 1,26,661 crore, from INR 1,22,090 crore in August 2020.
To give relief to the power generating companies (gencos), the Centre implemented a payment security mechanism from August 1, 2019. Under this mechanism, DISCOMs are required to open a letter of credit to obtain power supply.
Discoms were given some leeway by the central government to pay dues to the power generating companies (gencos) in the wake of the COVID-19-inspired lockdown. The government had also waived penalty fees for late payment of arrears in the directive.
Also, the government took the initiative to help gencos stay afloat in these tough times. In May, the government announced INR 90,000 crore liquidity infusions in respect of disputes – where the Power Finance Corporation (PFC) and REC were to provide loans at an economical rate. The infusion packaging was subsequently raised to INR 1.2 lakh crore.
As per available data, discoms in Rajasthan, Maharashtra, Uttar Pradesh, Jammu and Kashmir, Telangana, Andhra Pradesh, Karnataka, Jharkhand, Haryana, and Tamil Nadu account for the major portion of the arrears of power gencos.
In regards to overdue – the independent power producers accounted for 32.79 percent of the total outstanding amount of INR 1, 26,661 in September 2020. On the other hand, the proportion of central PSU gencos outstanding was 37.18 percent.
NTPC has an overdue amount of INR 22,235,02 on discoms among central power generators in the public sector alone, followed by NLC India in INR 6,770,20 on crore, Damodar Valley Corporation in INR 5,662,10 on crore, INR INR 3,579,06 on crore, and THDC India in INR 2,017.66 on crore.
The overdue amount of the non-conventional energy producers such as solar and wind stood at INR 10,680.28 crore in September 2020.
