Andhra DISCOM to Pay ₹4.5 Million Against Delayed Payment for a 6 MW Biomass Project

In its latest order, the Andhra Pradesh Electricity Regulatory Commission (APERC) has asked one of the state’s distribution companies (DISCOM), Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL) to pay ₹4.5 million (~$62,710) as the full and final settlement towards biomass project developer Satya Maharshi Power Corporation Limited’s (SMPCL) claim for interest.

The respondent in the case was APSPDCL, and the petitioner was SMPCL.

Background

Satya Maharshi Power Corporation had filed a petition against APSPDCL for the payment of interest against the delayed payments of the bills raised for a 6 MW biomass power project with the power purchase agreement dated May 10, 2004.



The PPA clearly stated:

“For any payment made beyond the due date of payment, the state’s transmission company (APTRANSCO),  will pay interest at the rate of 10% per annum as per the existing nationalized bank rate and in case this rate is reduced, such reduced rate is applicable from the date of reduction.”

APSPDCL in its counter affidavit, however, did not dispute the petition and submitted that the non-payment was on account of the non-availability of funds.

As APSPDCL unequivocally undertook to pay bills within a stipulated time with the payment of surcharge for the delayed payment, the commission decided to grant relief to the biomass developer.

The counsel of the DISCOM mentioned that APSPDCL is in “heavy losses and that the petitioner may, in public interest, give up a part of the interest claim.”

Responding to the submission, the counsel for the petitioner agreed to receive ₹4.5 million (~$62,710) as the full and final settlement towards the claim made by Satya Maharshi Power.

The commission has asked the APSPDCL to pay the amount within 45 days, failing which, the respondent will be liable to pay the entire interest.

The Central Electricity Authority’s (CEA) recent report states that the total payment due for 513 renewable projects now amounts to ₹97.356 billion (~$1.356 billion) as of July 31, 2019, thus  showing an increase of nearly ~ ₹15 billion (~$0.21 billion) compared to the previous figure of ₹82.3 billion (~$1.14 billion) for the same period. In total, these 513 projects have renewable energy projects generating a capacity of over 26 GW.

In August 2019, Mercom had reported that the payment dues were for 472 projects spread across the states of Andhra Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Odisha, Tamil Nadu, Rajasthan, Telangana, and Uttar Pradesh.