Power generating companies (gencos) recovered half of their legacy dues from distribution companies since the implementation of late payment surcharge (LPS) rules in June last year. The dues came down from Rs 1,20,540 crore in June 2022 to Rs 61,025 crore in July 2023, according to PRAAPTI portal.
“There has been a strong recovery of outstanding dues of power suppliers including generating and transmission companies from discoms after the Electricity (LPS and related matters) Rules, 2022 were enforced last year,” said an official of the power ministry.
The total legacy dues, comprising dues of gencos, transmission companies (transcos) and traders, which stood at Rs 1,39,747 crore in early June 2022, fell to Rs 69,957 crore by end of July 2023 after payment for 12 equal monthly installments (EMI). The rules made it mandatory for distribution companies to clear their legacy dues as existing on June 3, 2022, in a time bound manner in EMI with the benefit of non-applicability of LPS after its implementation date. The same rules also provided for time bound clearance of current dues failing, which will attract power supply cut.
The revamped distribution sector scheme (RDSS), a reform-based and results-linked scheme launched in July 2021, helped in transforming the electricity distribution sector.
The aggregate technical and commercial (AT&C) losses of discoms, which was 22.32% in FY21, fell to 13.5% in FY23. Besides, the gap between average cost of supply (ACS) and average revenue realized (ARR) has reduced from Rs 0.54 per kWh in FY15 to Rs 0.15 per kWh in FY22. “Reforms have been brought in with legal backing and there is strict implementation. Financial health of discoms have improved. Apart from clearing legacy dues, they are also clearing their current dues in time to avoid regulations,” the official said, adding that even the states are clearing their dues to discoms for the subsidies.
The measures also provided for discoms to avail loans from PFC Ltd and REC Ltd to clear their dues to generating companies. The power ministry has introduced additional prudential norms for sanctioning of working capital loans to discoms, transcos and gencos contingent to their performance and also compliance to LPS rules (by discoms).
The ministry has also requested all banks and financial institutions to implement the revised additional prudential norms for working capital loan to power sector players.