Power Distribution Companies' Dues To Gencos Rise 4.4% In January 2022

Power distribution companies' dues have risen on an annual basis
Power distribution companies' dues have risen on an annual basis

Outstanding dues owed to power producers by distribution companies (known as discoms) rose 4.4 per cent on a year-on-year basis to Rs 1,21,030 crore in January 2022.

Among the state-owned generation companies or gencos, NTPC alone has an overdue amount of Rs 4,298.32 crore on discoms, followed by NPCIL - KUDANKULAM NUCLEAR POWER PLANT at Rs 2,745.21 crore, Damodar Valley Corporation (DVC) at Rs 2,447.83 crore and Neyveli Lignite Corporation or NLC India Limited at Rs 2,206.86 crore in January 2022.

Among private generators, discoms owe the highest overdue amount of Rs 26,648.56 crore to Adani Power, followed by Bajaj Group-owned Lalitpur Power Generation Company at Rs 4,966.09 crore in the month under review.

In January 2021, discoms owed Rs 1,15,904 crore to power generation firms, which have now gone up to Rs 1,21,030 crore in January 2022, as per the payment ratification and analysis in power procurement for bringing transparency in invoicing of generators or PRAAPTI portal of the power ministry.

Sequentially too, total dues in January increased from Rs 1,15,462 crore in December 2021.

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

In January 2022, the total overdue amount, which was not cleared even after 45 days of grace period offered by generators, stood at Rs 1,01,357 crore as against Rs 99,650 crore in the same month a year ago. The overdue amount stood at Rs 99,981 crore in December 2021.

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

To give relief to power generation companies (gencos), the government 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 Centre had also given some breathers to discoms for paying dues to gencos in view of the Coronavirus-induced lockdown. The government had also waived penal charges for the late payment of dues.

In May 2020, the government had announced a Rs 90,000-crore liquidity infusion for discoms under which these utilities got loans at economical rates from Power Finance Corporation (PFC) and Rural Electrification Corporation (REC).

This was a government initiative to help gencos remain afloat. Later, the liquidity infusion package was increased to Rs 1.2 lakh crore and further to Rs 1.35 lakh crore.