Electricity distribution companies (discoms) under the Ujwal Discom Assurance Yojana (UDAY) scheme may have reduced their financial losses by Rs 17,352 crore or 50% annually by March-end.
Electricity distribution companies (discoms) under the Ujwal Discom Assurance Yojana (UDAY) scheme may have reduced their financial losses by Rs 17,352 crore or 50% annually by March-end, but their outstanding dues to power generators have surged by over 150% to Rs 32,071 crore in the same period. Payments of Rs 27,832 crore to gencos are pending for more than 60-days.
Irregular and often delayed payments by discoms have been cited as the primary reason behind private generation assets becoming stressed. Power projects worth Rs 1,80,000 crore are now stressed, including non-performing assets of some Rs 70,000 crore. Although it is not immediately known who much of the unpaid dues were reckoned by the discoms as ‘payables’ as they reported the reduction in losses, industry sources said their losses would have been significantly higher if generation companies were paid in time.
Apart from the above-mentioned dues, discoms would also have to pay about Rs 8,000 crore to power producers after electricity regulators clear a clutch of pending appeals on allowing pass-through of costs by generators under ‘change in law’ provisions While outstanding receivables of state-run power producer NTPC stands at Rs 9,479 crore, the same for 10 independent power producers (IPPs), including Tata Power, Adani Power, GMR and Jindal Steel and Power, are more than Rs 14,000 crore. Another Rs 7,000 crore needs to be paid to state-run NHPC. DVC, NEEPCO and SJVNL.
Besides these, sources said, that discoms may have liabilities totalling Rs 6,000 crore to smaller power producers. After registering a slight dip in outstanding dues to generators in August, 2017, the amount has been sharply increasing. Uttar Pradesh, Telangana, Tamil Nadu, Maharashtra and Karnataka comprise more than 60% of such unpaid dues. “Abnormal increase in payable clearly shows that the financial conditions of discoms are still precarious,” said Ashok Kumar Khurana, director general, Association of Power Producers.
While launching the Praapti portal last month, aimed to bring transparency in discom payment mechanism, power minister RK Singh had said that there might be situations where the payment conditions are not followed according to the terms of the PPAs. “Maybe because gencos are in a relatively weaker position than discoms, I don’t see many IPPs complaining about untimely payment,” Singh added.
The loss reduction of the discoms is the combined effect of factors such as savings in interest cost, power purchase cost, establishment cost and tariff rationalisation. There has also been an improvement in billing efficiency.