CEA to Maintain Database of Outstanding Dues by DISCOMs to Solar, Wind Developers

The Central Electricity Authority (CEA) is planning to maintain the database of all outstanding dues by distribution companies (DISCOMS) to renewable energy generators.

Several developers have been in a tough spot due to the non-payment of their dues by various state distribution companies. Payment delays are becoming a major problem again for solar and wind project developers in India, especially in Andhra Pradesh, Tamil Nadu, and Telangana. Some instances in Madhya Pradesh and a DISCOM in Karnataka have also been blamed for long payment delays to developers.

A few months ago, Mercom had reported that the DISCOMs in Andhra Pradesh, Telangana, and Karnataka were staring at acute power shortages as the National Thermal Power Corporation (NTPC) warned that it would stop supply due to non-payment of dues. The three states together owed NTPC ₹58.38 billion (~$814.99 million) in outstanding power bills (both conventional and solar). A total amount of ₹18.84 billion (~$262.6 million) was due to be paid by these DISCOMs to the NTPC for solar power supplied under the National Solar Mission (NSM).

In its letter dated August 5, 2019, the CEA has asked renewable generators to provide the details of such dues every month. They have also been asked to submit their contact details so that they can have access to PRAAPTI portal. PRAAPTI stands for Payment Ratification And Analysis in Power Procurement for bringing Transparency in Invoicing of generators. It is an online platform aimed at enhancing transparency and encouraging best practices in power purchase transactions.



Recently, the National Solar Energy Federation of India (NSEFI) wrote to the Minister for Power, New and Renewable Energy, R. K. Singh, seeking the creation of a fund for providing liquidity to state DISCOMs which would help solar power producers. The letter elaborated on how rampant payment delays are affecting the independent solar power producers.

The non-payment of dues by DISCOMs has been a persistent issue in the renewable industry, and the government has acknowledged the problem and aims to address it. The Ministry of Power has issued procedural guidelines for the scheduling of power to distribution companies in case of non-maintenance of the line of credit under the payment security mechanism.

Recently, Minister for Power R. K. Singh had announced that it would be mandatory for DISCOMs to open and maintain adequate Letters of Credit (LC) as the payment security mechanism under power purchase agreements.