Debt of power distribution companies reduced by 33% to Rs 93,000 crore

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Ahmedabad: Less than a year after the late payment surcharge rules came into force in June 2022, the total dues of power distribution utilities ie discoms declined by a third in May to around Rs. 93,000 crores. Rising dues of discoms to power generators (gencos) and transmission companies have been affecting the entire value chain of the sector since last year.

According to industry data, when the late payment surcharge scheme was launched in June last year, discoms were charged Rs. 1.39 lakh crore. Payment ratification and analysis in power procurement was introduced in 2018 to bring transparency in invoicing of generators, i.e. as per the procurement portal, the total dues now stand at around Rs. 93,000 crores.

Under the new rules, non-payment by discoms after one month of payment due date or two and a half months after presentation of electricity bill, whichever is later, attracts penalty of power cut under late payment surcharge .

During the first wave of Corona Pandemic in May 2020, Govt. through PFC & REC under the low rate loan scheme for DISCOMs. 90,000 crore liquidity was announced. Later the infusion package was increased to Rs. 1.2 lakh crore and now Rs. 1.35 lakh crore has been done.

According to experts, the new rule ensures that discom dues are paid on time. The late payment surcharge scheme has played a vital role in bringing financial discipline in discoms and its strict implementation in the near future could make the power sector more viable.