Discom dues rise to ₹1.23 lakh cr in April

NEWDELHI: Power producers’ total outstanding dues owed by distribution firms rose nearly 63% to ₹1.23 lakh crore in April 2020 over the same month previous year, reflecting stress in the sector.

Distribution companies (discoms) owed a total of ₹75,642 crore to power generation firms in April 2019, according to portal Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators (PRAAPTI).

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

In April 2020, the total overdue amount, which was not cleared even after 60 days of grace period offered by generators, stood at ₹1,08,487 crore as against ₹58,200 crore in the same month of the preceding year.

According to the latest data on the portal, total outstanding dues in April has increased over the preceding month. In March 2020, the total dues of discoms stood at ₹1,13,048 crore.

The overdue amount in April 2020 also increased from ₹1,01,181 crore in March 2020. Power producers 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 power generation companies (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.

The central government had given moratorium to discoms for paying dues to gencos in view of Covid-19-induced lockdown. The government had also waived the penal charges for late payment of dues in the directive.

Last month, the government announced ₹90,000 crore liquidity infusion for discoms under which these utilities would get loan at economical rates from Power Finance Corporation and REC Ltd. This was an initiative of the government to help gencos to remain afloat. 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.