Discoms’ dues to gencos increased by 47% in June

NEW DELHI: Power producers’ total outstanding dues owed by distribution firms rose over 47% year-on-year to ₹1.33 lakh crore in June 2020, reflecting stress in the sector.

Distribution companies (discoms) owed a total of ₹90,655 crore to power generation firms in June 2019, according to portal PRAAPTI (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 the generators and discoms.

In June 2020, the total overdue amount, which was not cleared even after 60 days of grace period offered by generators, stood at ₹1,20,041 crore, as against ₹72,362 crore in the year-ago period.

According to the latest data on the portal, total outstanding dues in June has increased over the previous month. In May 2020, the total dues of discoms stood at ₹1.26 lakh crore.

The overdue amount in June 2020 also i nc r e a s e d from ₹1,13,869 crore in May 2020.

Power producers give 60 days to distribution companies 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 f rom August 1, 2019. Under this mechanism, discoms are required to open letters of credit for getting power supply.

The central government had given some breathers to discoms for paying dues to power generating companies (gencos) in view of Covid-19-induced lockdown. The government had also waived the penal charges for late payment of dues in the directive.