Discoms’ outstanding dues to power gencos rise nearly 17% to Rs 1.02 lakh crore in February 2021

Total dues owed by electricity distribution companies to power producers rose nearly 17 per cent to Rs 1,02,684 crore in February this year. Distribution companies (discoms) owed a total of Rs 87,888 crore to power generation firms in February 2020, according to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators).

However, total outstanding dues of discoms towards power generation firms in February slightly dipped from Rs 1,03,116 crore in January this year and Rs 102,676 crore in December 2020. The PRAAPTI portal was launched in May 2018 to bring in transparency in power purchase transactions between generators and discoms.

In February 2021, the total overdue amount, which was not cleared even after 45 days of grace period offered by generators, stood at Rs 91,549 crore as against Rs 73,867 crore in same month a year ago. The overdue amount stood at Rs 92,120 crore in January 2021 and Rs 93,599 crore in December 2020.

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 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 in view of the COVID-19-induced lockdown.

The government had also waived penal charges for late payment of dues in the directive. In May, the government announced Rs 90,000 crore liquidity infusion for discoms under which these utilities would get loans at economical rates from Power Finance Corporation (PFC) and REC Ltd. 

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

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