Distribution companies (discoms) owed Rs 92,693 crore to power producers in February 2020, registering an increase of 31 per cent over the year-ago same month, reflecting stress in the sector. In February 2019, discoms owed a total of Rs 70,706 crore to power generation companies (gencos), according to portal PRAA (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators).
The portal was launched in May 2018 to bring in transparency in power purchase transactions between gencos and discoms. In February 2020, the total overdue amount, which was not cleared even after 60 days of grace period offered by gencos, stood at Rs 80,616 crore as against Rs 53,703 crore in the same month of the preceding year.
According to the latest data on the portal, outstanding dues in February 2020 has increased over the preceding month. In January, the total dues of discoms stood at Rs 88,859 crore. The overdue amount in February also increased over the preceding month, from Rs 76,585 crore in January 2020.
Gencos give 60 days 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 relief to gencos, the Centre enforced a payment security mechanism from August 1, 2019. Under this mechanism, discoms are required to open letters of credit for getting power supply.
At present, the central government has given leeway to discoms for paying dues to gencos in view of the lockdown to contain COVID-19 across the country. The government has also waived the penal charges for late payment of dues in a directive issued earlier last month.
Discoms in Rajasthan, Uttar Pradesh, Jammu & Kashmir, Telangana, Andhra Pradesh, Karnataka and Tamil Nadu account for the major portion of dues to power gencos, the data showed. Overdues of independent gencos amount to 25.42 per cent of the total overdue of Rs 80,616 crore of discoms in February. The proportion of PSU gencos in the overdue was 39.53 per cent.
Among the central public sector power generators, NTPC alone has an overdue amount of Rs 11,615.80 crore on discoms, followed by NLC India at Rs 5,208.51 crore, Damodar Valley Corporation at Rs 4,920.39 crore, NHPC at Rs 2,842.75 crore and THDC India at Rs 2,188.90 crore. The overdue of non-conventional energy producers like solar and wind, stood at Rs 7,095.86 crore in February.