Distribution companies owed a total of Rs 50,583 crore to power generation companies in September 2018
Power producers’ total outstanding dues owed by distribution companies rose around 37 per cent to Rs 69,558 crore in September 2019 over the same month last year, reflecting stress in the sector. Distribution companies owed a total of Rs 50,583 crore to power generation companies in September 2018, according to web portal and app namely PRAAPTI (Payment Ratification and Analysis in Power procurement for Bringing Transparency in Invoicing of generators).
The portal was launched in May 2018 to bring a transparency in power purchase transactions between generators and discoms (distribution companies). In September this year, total overdue amount, which was not cleared even after 60 days of grace period offered by generators, stood at Rs 52,408 crore as against Rs 34,658 crore in the same month last year. Power producers give 60 days’ time to discoms 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 a relief to power generation companies, the Centre has enforced a payment security mechanism from August 1. Under this mechanism, discoms are required to open letters of credit for getting power supply. Data on the portal indicates that outstanding as well as overdue amount have decreased over the preceding month. In August 2019, total outstanding on discoms was Rs 80,087 crore, while the total overdue amount was Rs 60,935 crore. The August 2019 figures of dues and overdues have been revised upwards from Rs 78,020 crore and Rs 59,532 crore provisional numbers released last month on the portal. Discoms in Rajasthan, Jammu and Kashmir, Telangana, Andhra Pradesh, Karnataka, Tamil Nadu account for the major portion of dues to power generating companies, taking a longer duration of up to 881 days to make payments, the portal showed. Among major states, Rajasthan tops the list with 881 days to make payments, followed by Haryana (879 days), Tamil Nadu (877 days), Madhya Pradesh (866 days) and Telangana (859 days) in that order. Delhi, a smaller state, takes 908 days to make payments to power generating firms. Overdues of independent power producers amount to over 23.06 per cent of the total overdue of Rs 52,408 crore on Discoms. Central PSU NTPC alone has an overdue amount of Rs 9,921.78 crore on Discoms.