Tamil Nadu Commission Asks DISCOM to Pay Interest Dues to Two Wind Generators

The Tamil Nadu Electricity Regulatory Commission (TNERC) has directed the Tamil Nadu Generation and Distribution Company (TANGEDCO) to make payments to two wind generators claiming interest dues against the power supplied and banked.

Shakthi Murugan Textiles and Angalakshmi Spinning Mills had requested the Commission to direct TANGEDCO to pay the interest due for the delayed payment for the supply of electricity from October 2010 to November 2012. Both consumers of high-tension electricity had installed the wind projects to meet their own energy requirements, selling the surplus to the DISCOM.

The petitioners said they had raised monthly bills for the generated units purchased by the DISCOM. However, the petition said that the respondent failed to make the payment within the due date. When the payment was made, they did not pay interest for the delayed payment.

The amount was calculated at a 12% interest rate after 30 days from the date of the invoice. The developers had also requested the Commission to ask TANGEDCO to pay interest for the delayed payment of unutilized banked energy after seven days from the date of the invoice. It was calculated at the interest rate of 18% for the period between 2008-2012.


A break-up of the charges is given below:

Tamil Nadu - Interest Amount Claimed by the Wind Generators Towards Delayed Payments

Both the generators had requested the Commission to impose a rate of 1% per month for the delayed payment on the purchase of power.

The wind generators said that TANGEDCO had violated the wind energy tariff order, which directs the distribution licensee to pay interest for the delayed payment beyond 30 days from the date of the receipt of the bill.

The petitioners said that due to the non-payment of interest on overdue payment, the petitioners had to pay compounding rate of interest and suffer financially.

TANGEDCO, in its reply, said that the delay in making payments was due to financial constraints and was not intentional. TANGEDCO said that it had huge outstanding payments to the tune of ₹40 billion (~$534.69 million) to several generators, including coal. The state DISCOM also added that it was taking all the steps to improve the power situation, which would help in revenue realization from the customers.

The Commission stated that the contract between the petitioners and TANGEDCO provides for payment of 1% interest per month for delayed payment. Since TANGEDCO has not denied its liability

Both the generators had requested the Commission to impose a rate of 1% per month for the delayed payment on the purchase of power.

The wind generators said that TANGEDCO had violated the wind energy tariff order, which directs the distribution licensee to pay interest for the delayed payment beyond 30 days from the date of the receipt of the bill.

The petitioners said that due to the non-payment of interest on overdue payment, the petitioners had to pay compounding rate of interest and suffer financially.

TANGEDCO, in its reply, said that the delay in making payments was due to financial constraints and was not intentional. TANGEDCO said that it had huge outstanding payments to the tune of ₹40 billion (~$534.69 million) to several generators, including coal. The state DISCOM also added that it was taking all the steps to improve the power situation, which would help in revenue realization from the customers.

The Commission stated that the contract between the petitioners and TANGEDCO provides for payment of 1% interest per month for delayed payment. Since TANGEDCO has not denied its liability

Both the generators had requested the Commission to impose a rate of 1% per month for the delayed payment on the purchase of power.

The wind generators said that TANGEDCO had violated the wind energy tariff order, which directs the distribution licensee to pay interest for the delayed payment beyond 30 days from the date of the receipt of the bill.

The petitioners said that due to the non-payment of interest on overdue payment, the petitioners had to pay compounding rate of interest and suffer financially.

TANGEDCO, in its reply, said that the delay in making payments was due to financial constraints and was not intentional. TANGEDCO said that it had huge outstanding payments to the tune of ₹40 billion (~$534.69 million) to several generators, including coal. The state DISCOM also added that it was taking all the steps to improve the power situation, which would help in revenue realization from the customers.

The Commission stated that the contract between the petitioners and TANGEDCO provides for payment of 1% interest per month for delayed payment. Since TANGEDCO has not denied its liability

to pay the interest amount, the interest at 1% per month should be payable for the late payment of the invoice amount.

In its order, the state Commission directed TANGEDCO to pay 12% interest after 30 days from the date of invoice for the delayed payment for the supply of electricity and interest rate of 10% for late payment for the encashment of unutilized banked energy after seven days from the date of invoice. The Commission directed TANGEDCO to rework the calculations concerning the settlement of dues and make the payment within three months.

Recently, TNERC also directed TANGEDCO to make payments to the tune of ₹74.8 million (~$998,885) to six wind power generators in interest due against delayed payments for supplied power. The six wind generators asked the Commission to direct TANGEDCO to pay its dues along with interest.

Previously, Mercom had reported that payment delays were becoming a problem again for solar and wind project developers in India, especially in Andhra Pradesh, Tamil Nadu, and Telangana.