Pending dues of discoms to gencos rise 4% to ~1.21 trn

Total outstanding dues of electricity distribution companies to power producers rose by 4.04 per cent year-on-year to ~1,21,765 crore in May 2022, according to the official data.

Discoms owed a total of ~1,17,026 crore to power generation firms in May 2021, according to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators).

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

On a sequential basis too, total dues in May 2022 increased from ~1,20,954 crore in April 2022. In May 2022, the total overdue amount, which was not cleared even after 45 days of a grace period offered by generators, stood at ~1,06,902 crore as against ~94,354 crore in the same month a year ago. The overdue amount stood at ~1,06,071 crore in April 2022.

Power producers give 45 days to discoms to pay bills for electricity supply. After that, outstanding dues become overdue and generators charge interest on that in most cases.

To give relief to power generation companies (gencos), the Centre enforced a payment security mechanism from August 2019. Under this mechanism, discoms are required to open letters of credit for getting power supply.

The Centre had also given some breather to discoms for paying dues to gencos in view of the Covid-induced lockdown. It had also waived penal charges for the late payment of dues. In May 2020, the government had declared a ~90,000-crore liquidity infusion for discoms under which these utilities got loans at economical rates. This was a government initiative to help gencos remain afloat.