Maharashtra regulator gives state discom leeway in payment to wind firms

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New Delhi | Published: January 15, 2019 4:58:45 AM

The discom had submitted a payment plan to the regulator where it stated that it would clear dues worth Rs 1,592 crore against wind-based electricity procured till September 2017 within December 2018.

While the power purchase agreements (PPAs) require the discom to pay wind power generators within 45 days after invoices are raised, the regulator has allowed it to make the payments according to a liberal schedule proposed by it. (Representational photo: Reuters)

In a move that has few precedents in the country, the Maharashtra electricity regulator has given the state’s electricity discom MSEDCL leeway in the timeline for paying the dues to wind power generators.

While the power purchase agreements (PPAs) require the discom to pay wind power generators within 45 days after invoices are raised, the regulator has allowed it to make the payments according to a liberal schedule proposed by it.

The discom had submitted a payment plan to the regulator where it stated that it would clear dues worth Rs 1,592 crore against wind-based electricity procured till September 2017 within December 2018. Payment for generation up to March 2018, amounting to Rs 578 crore, would be released by end of FY19.

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Given the financial situation of the discom, the regulator identified “one time settlement as a practical and pragmatic way to clear long outstanding dues”.

Blaming inadequate tariff hikes approved by the regulator, the discom claimed that the payment delays were not deliberate but “solely attributable to the financial constraints”. MSEDCL said that since the regulator did not approve requisite tariff hikes, it resulted into a huge revenue gap of Rs 17,670 crore between FY16-18 for the state-owned entity.

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A clutch of wind power plant owners, which includes units of Singapore-based Sembcorp Industries and Hong Kong-based CLP Holdings, were among the companies to raise the issue of delayed payment to the Maharashtra electricity regulatory commission. The two companies claimed outstanding payments of Rs 262 crore and Rs 41 crore, respectively.

Regulatory filings also revealed that the Maharashtra discom owed Rs 3.1 crore to film actor Aishwarya Rai Bachchan against invoices issued till April 2018 pertaining to her wind power plants in the villages of Dhandane and Adwadi.

The companies pointed out that MSEDCL neglected several requests to pay the principal amount and had forced companies to forego the late payment surcharges and waive off 100% of the interest against outstanding dues.

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While allowing the discom to make the payments as per the proposed trajectory, the regular said that the discom to cover the payments of all the wind generators in a chronological manner (date wise seniority of outstanding dues). An MSEDCL official claimed that the Rs 1,591.9 crore dues till September 2017 have already been cleared by December, 2018. However, a senior official from a wind generator told FE on conditions of anonymity that companies disagreeing to waive off late penalty amounts are still finding it difficult to recover their dues.

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