Power Ministry urges states to direct utilities to clear dues to power generation cos, coal firms

NEW DELHI: The Ministry of Power has urged certain states, including Uttar Pradesh, Tamil Nadu and Maharashtra, to direct their utilities to clear total outstanding dues towards generating firms (gencos) and coal companies as failing to do so might affect electricity supply.

Union Power Secretary Alok Kumar has shot off letters to chief secretaries of states including Uttar Pradesh, Tamil Nadu, Maharashtra, Rajasthan, Madhya Pradesh and Union Territory of Jammu and Kashmir in this regard.

The letter, a copy of which was reviewed by PTI, urged the chief secretaries to direct the utilities in their states to immediately clear the outstanding dues of gencos and coal companies, failing which the electricity supply to their states might get severely affected.

Kumar highlighted that lack of adherence to basic payment discipline by the utilities is not only causing supply side problems in generation of electricity, but also adversely affecting new investment in the sector.

He stated that public utilities have higher responsibility to be ideal paymasters and upholders of contract laws of the country, adding that repeated indiscretion on part of the utilities goes against the very essence of these basic responsibilities.

If the utilities continue to renounce their responsibilities for timely payments to their creditors, and do not wipe out their past and current dues on an urgent basis, this will have a perilous effect on the power supply, he stated.

Inability of the utilities to pay for legitimate dues against electricity dispatched and the coal received is increasing the electricity supply side concerns to unprecedented levels, he added.

The pending dues of gencos and Coal India Ltd (CIL) have been a matter of grave concern for quite some time. This is posing a threat to reliable power supply, the secretary noted.