Distribution companies (DISCOMs) owed renewable energy generators ₹68.37 billion (~$914.5 million) in outstanding payments spread across 307 pending invoices at the end of March 2020, according to data from the Ministry of Power’s (MoP) payment ratification and analysis portal (PRAAPTI). This included dues of ₹311 million (~$4.2 million) under dispute.
Overall, power generators were owed about ₹905.77 billion (~$12.11 billion) in overdue outstanding payments at the end of March 2020. Overdue outstanding payments, excluding payments under dispute, stood at ₹798.29 billion (₹10.67 billion) by the end of the month. Overdue outstanding amounts are payments that have been delayed by over six months.
Data from the portal showed that 65 DISCOMs had over 12,783 overdue invoices with 89 participating generating companies. This is an increase from 64 DISCOMs and 11,598 overdue invoices to 87 generators at the end of January 2020. The outstanding amount at the beginning of March stood at ₹928.91 billion (~$12.42 billion).
Tata Power Company Limited (TPCL) and Adani Green Energy Limited (AGEL) were the two non-conventional power generators that were owed the highest amount at ₹17.42 billion (~$232.9 million) and ₹12.59 billion (₹168.4 million), respectively.
In a recent filing on its operational and financial highlights for the quarter and year, Adani Green said it has outstanding dues of ₹4.37 billion (~$58.12 million) from the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) as of March 31, 2020.
The PRAAPTI data also showed that DISCOMs had paid all non-conventional power generators ₹5.54 billion (~$74.1 million) by the end of March 2020, compared to just ₹1.70 billion (~22.7 million) in the previous month.
Rajasthan, Uttar Pradesh, and Tamil Nadu had racked up the most outstanding dues, overall. DISCOMs in Rajasthan had the highest overdue outstanding amounts at around ₹228.40 billion (~$3.05 million), of which ₹198.48 billion (~$2.65 billion) have been overdue for over 60 days.
Tamil Nadu had the second largest number of pending dues amounting to about ₹138.29 billion (~$1.85 billion), of which ₹122.26 billion (~$1.64 billion) has been overdue for more than 60 days. Uttar Pradesh was a close third with ₹136.89 billion (~$1.83 billion), comprising ₹110.37 billion (~$1.47 billion) of overdue older than 60 days.
Haryana, Rajasthan, Delhi, Uttarakhand, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, West Bengal, Odisha, Arunachal Pradesh, Nagaland, Manipur, Meghalaya, Telangana, Andhra Pradesh, Goa, Karnataka, Kerala, Tamil Nadu, and Puducherry were rated “Worst” in terms of ease of payments to DISCOMs, according to the portal.
Gujarat, Maharashtra, Himachal Pradesh, Punjab, Bihar, Sikkim, and Mizoram were rated “Good” in terms of ease of payments to DISCOMS, while Jharkhand, Assam, and Tripura were rated “Best.” Jammu & Kashmir was rated one stage below “Worst” with ₹54.65 billion (~$730.9 million) in overdue payments.
Mercom recently reported that despite all the relief provided considering the ongoing pandemic, many DISCOMs, including those in Uttar Pradesh, Madhya Pradesh, and Andhra Pradesh, have been refusing to pay the power generators claiming their inability to collect power dues from the consumers. On the other hand, the DISCOMs’ claim of force majeure (Coronavirus outbreak) for not paying generators has been rejected by the Solar Energy Corporation of India (SECI).
To help ailing generators during the COVID-19 crisis, the Ministry of Power also issued a clarification regarding letters of credit (LoC) to be given by DISCOMs. It stated that DISCOMs are expected to deposit LoCs for 50% of the cost of power they want to be scheduled, while the remaining 50% will have to be paid within 45 days of the presentation of the bill or as specified in the power purchase agreement (PPA). If the payment is not made as specified, the late payment surcharge will apply.
Further, the Central Electricity of Regulatory Commission (CERC) reduced the rate for late payment surcharge payable by distribution companies to power generators. The LPS is now reduced to 12% per annum from the earlier 18% if the due date falls between March 24, 2020, and June 30, 2020. According to the CERC, if there’s any delay in the payment to the generating companies and inter-state transmission licensees beyond 45 days from the date of presentation of the bills (between March 24, 2020, and June 30, 2020), then the DISCOMs can make the payment of LPS at a reduced rate of 1% per month instead of 1.5%.
Previously, Mercom reported that DISCOMS owed renewable generators ₹62.19 billion (~$856.2 million) in overdue outstanding payments at the end of January 2020. Excluding payments under dispute, overdue payments stood at ₹61.88 billion (~$851.9 million) or 8.12%, of all overdue outstanding amounts. Overdue outstanding amounts are those where the delay has been over six months.
Nithin is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai.