Finances of electricity distributors in the red, dues to gencos rise by 17%

The total outstanding dues owed by financially distressed electricity distribution companies (discoms) to power producers increased by 17.3% in April this year compared to the same period last year.

In absolute terms, the dues rose to ₹1,23,244 crore in April 2022, against ₹1,05,029 crore in April 2021, according to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators).

Sources said the finances of many discoms are in the red and are looking for the government’s support.

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

In May 2020, the government had announced ₹90,000-crore liquidity infusion for discoms under which these utilities got loans at economical rates from Power Finance Corporation (PFC) and REC. This was a government initiative to help gencos remain afloat. Later, the liquidity infusion package was increased to ₹1.2 lakh crore and further to ₹1.35 lakh crore.

In April 2022, the overdues, not cleared even after 45 days of grace period, stood at ₹1,04,885 crore as against ₹84,376 crore in the same month a year ago.

Power producers give 45 days grace period to discoms to pay bills for electricity supply. After that, the outstanding dues become overdue and generators charge penal interest.

To give relief to power generation companies, the Centre enforced a payment security mechanism from August 1, 2019, under which discoms are required to open letters of credit for getting power supply.

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The Centre had also given some breather to discoms for paying dues to gencos in view of the COVID-19-induced lockdown. The government had also waived penal charges for the late payment of dues.

Discoms in Rajasthan, Uttar Pradesh, Jammu and Kashmir, Telangana, Andhra Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Jharkhand and Tamil Nadu account for a major portion of dues to gencos in April.

Tamil Nadu tops the list among discoms with dues, with more than ₹22,000 crore pending towards power generators. Following Tangedco is Maharashtra with ₹21,257 crore pending.

Overdues of independent power producers amounted to 55.63% of the total overdue of ₹1,04,885 crore of discoms. The proportion of central PSU gencos in the overdue was 21.84%.

Among central public sector gencos, NTPC alone has an overdue amount of ₹4,223.50 crore, followed by DVC at ₹3,571.83 crore and NPCIL-Kundankulam Nuclear Power Plant at ₹3,179.13 crore in April 2022.

Among private generators, the highest overdue amount owed is ₹25,586.73 crore to Adani Power, followed by Bajaj Group-owned Lalitpur Power Generation Company at ₹5,309.29 crore.

The overdue of renewable energy producers stood at ₹20,827.22 crore in April 2022.