Discom dues to power gencos increase 35% to Rs 1.41 lakh crore
In November 2020, the total dues of discoms to power generation companies increased by 35 percent to INR 1.41 lakh crore, as per the PRAA portal…
In November 2020, the total dues of power producers by distributions firms increased by more than 35 percent to INR 1, 41,621 crore, reflecting stress in the sector.
In November 2019, distribution companies (discoms) owed INR 1, 04,426 crore to power generation firms, as per the PRAA portal (Payment Ratification and Analysis in Power procurement to bring Transparency in Invoicing of generators).
In order to ensure transparency in power purchase transactions between generators and discoms, the PRAA Portal was launched in May 2018.
In November 2020, INR 1,29,868 crore, compared to INR 93,215 Crore in the year-ago period was the total overdue amount, which was not cleared even after 45 days of the grace period offered by the generators.
According to the latest data from the portal, the total dues have increased on a month-on-month basis in November. In October 2020, the total outstanding of discoms was INR 1, 39,057 crore.
In November 2020, the overdue amount increased from INR 1, 26,444 in October 2020.
Power producers give discoms 45 days to pay electricity supply bills. After that, the arrears become overdue and generators charge punitive interest on them in most cases.
The central government implemented a payment protection mechanism from August 1, 2019, to give relief to the power generating companies (gencos). Thus, to obtain the supply of power distribution companies need to open a letter of credit.
Also, Discoms were given some leeway by the central government to pay dues to power generation companies in the wake of COVID-19-induced lockdown. The government had also waived penalty fees for late payment of arrears in the directive.
In May, the government announced an INR 90,000 crore liquidity infusion for discoms, under which these utilities would get loans from Power Finance Corporation (PFC) and REC Limited at affordable rates. This was an initiative by the government to help gencos to remain afloat. Later, the liquidity infusion package was increased to INR 1.2 lakh crore.
According to the data, Rajasthan, Maharashtra, Uttar Pradesh, Jammu and Kashmir, Telangana, Andhra Pradesh, Karnataka, Jharkhand, Haryana and Tamil Nadu are responsible for a major portion of dues power generation companies.
In November 2020 around 34 percent of the discoms total overdue of INR 1, 29,868 crore was pending to independent power producers. Whereas, the ratio of central PSU Generation companies overdue was 34.27 percent on discoms.
The NTPC alone has overdue INR 19,215.97 crore on discoms, among the central public sector power generators, followed by NLC India at INR 6,932.06 crore, Damodar Valley at INR 6,238.03 crore, NHPC in INR 3,223.88 crore, and THDC India at INR 2,085.06 Crore.
The largest overdue of INR 20,242.74 crore among private generators is due to Adani Power, followed by Lalitpur Power Generation Company Ltd, INR 4,373.23 Crore owned by the Bajaj group, GMR at INR 2,195.12, crore and SEMB (Sembcorp) at INR 2,168.45 crore, respectively.
In November, INR 11,862.07 crore was overdue to non-conventional power producers such as solar and wind.
