The union ministry of power is working on a scheme to liquidate the dues of power distribution companies so that they are able to repay their debts in easy instalments without further accumulation of late payment surcharge (LPSC), reported Mint.
The ministry said a one-time relaxation is being considered for all discoms where the amount outstanding, including principal and LPSC on the date of notification of the scheme, will be frozen. The discoms can repay the outstanding amount in up to 48 instalments, the report further added.
As on 18 May, the discoms’ overdue, excluding disputed amounts, stood at just over ₹1 trillion and LPSC dues were ₹6,839 crore. The ministry noted that the inability of discoms to pay dues impacts the entire value chain of the power sector.
The total outstanding dues of electricity distribution companies to power producers rose by 4.04 per cent year-on-year to ₹1,21,765 crore ( ₹1.21 trillion) in May 2022, according to the official data.
According to data from PRAAPTI (Payment Ratification and Analysis in Power Procurement for bringing Transparency in Invoicing of Generators), discoms owed a total of ₹1,17,026 crore to power generation firms in May 2021.
The government's measures to ease power supply constraints through higher coal imports are likely to increase the cost of supply for discoms by 4.5-5.0 per cent in 2022-23, ICRA said in a report.
On May 5, the Ministry of Power (MoP) issued a directive under Section 11 of the Electricity Act, stating that all imported coal-based power plants shall operate and generate power at their full capacity to meet the growing demand, ICRA stated.