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Discoms dues rose over 28% YOY

Power producers\' total dues owed by distribution firms rose over 28 per cent year-on-year to Rs 1,38,479 crore in September 2020, reflecting stress in the sector. Distribution companies (discoms) owed a total of Rs 1,07,930 crore to power generation firms in September 2019, according to portal PRAA (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 September 2020, the total overdue amount, which was not cleared even after 45 days of grace period offered by generators, stood at Rs 1,26,661 crore, as against Rs 85,790 crore in the year-ago period.

According to the latest data on the portal, total outstanding dues in September increased on a month-on-month basis as well. In August 2020, total outstanding dues of discoms stood at Rs 1,34,928 crore. The overdue amount in September 2020 has increased from Rs 1,22,090 crore in August 2020.

Power producers give 45 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 also 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 penal charges for late payment of dues in the directive.

 

[source: businesstoday.in, 08/11/2020]

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