Power distribution companies across states are in bad shape. According to recent audit reports DISCOM losses have grown bigger than earlier estimate. Data from the Ministry of Power’s (MoP) payment ratification and analysis portal (PRAAPTI) showed that 65 DISCOMS owed 197 power generators ₹1.199 trillion in overdue payments (Up by 5.33% vis-à-vis May’20). Nearly ₹905.77 billion at the end of March 2020.
Among these, Rajasthan had the highest overdue payment at ₹349.37 billion. Tamil Nadu had the second-highest amount of overdue payment at ₹175.29 billion, of which ₹149.11 billion has been overdue for over 60 days. Uttar Pradesh was at the third spot with overdue payments of ₹144.09 billion, of which ₹104.85 billion has been overdue for more than 60 days. (Source: PRAAPTI portal)
Among the southern states, Tamil Nadu’s position is most stressed. The worrying fact is that the state payables are pilling month over months and not giving any respite to generators. The state has not revised the tariff for many years despite power debt situation going out of control. Tamil Nadu Generation and Distribution Corporation (TANGEDCO) owes more than Rs 6,000 Crs to Interstate Independent Power Producers (IPPs). Few of the IPPs have written letters to TANGEDCO for encashing the Letter of Credit (that has been provided after MoP’s intervention last year July) if payment is not released to them promptly.
DISCOMs are currently facing range of issues such as operational inefficiency, unrealistically low tariffs and sharp fall in industrial power demand which is affecting their ability to pay power suppliers on time putting huge financial stress on generators.