The total dues owed by distribution firms to power generation companies increased by 35 per cent in November 2020. Discoms had a total due amount of Rs 1,41,621 crore in November 2020 whereas it was Rs 1,04,426 crore in November 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 November 2020, the total overdue amount, which was not cleared even after 45 days of grace period offered by generators,
stood at Rs 1,29,868 crore as against Rs 93,215 crore in the year-ago period.
According to the latest data on the portal, total outstanding dues in November increased on a month-on-month basis as well. In October 2020, the total outstanding dues of discoms stood at Rs 1,39,057 crore. The overdue amount in November 2020 has increased from Rs 1,26,444 crore in October 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. 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 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.
