Power distributors’ woes deepen even as power demand rises; pending dues touch new height in September

The pending dues of power distribution companies to power generation companies are on a rise even as the demand for power has risen in recent months. The total pending dues of discoms rose 48 per cent on-year and 4 per cent on-month to Rs 1.27 lakh crore as of September 2020, said a report by Emkay. Also, the total outstanding amount was Rs 1.39 lakh crore, which was higher than the November 2015 peak of Rs 1.35 lakh crore. The discoms in Rajasthan, Tamil Nadu, Uttar Pradesh, Karnataka, Maharashtra, J&K, and Telangana account for 79 per cent of the total overdue to generation companies.

Of the total overdue to the gencos, PSUs have the highest share at 37.2 per cent, followed by independent power producers (32.8 per cent), state gencos (21.6 per cent), and renewable energy producers (8.4 per cent).  Among private gencos, Adani Power has the highest share in the total overdue at nearly Rs 20,200 crore, while NTPC has the highest overdue among the PSUs at nearly Rs 25,800 crore.

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It is believed that the discoms’ overdues could take a while to moderate as power generation saw a sharp pick-up in October 2020 against which additional receivables could be formed. However, the improvement in discoms’ collection efficiencies and increased disbursement under the Atmanirbhar scheme should curtail the further expansion of overdues, the report added.   

It is to be noted that the Modi government had extended the liquidity package of Rs 1.2 lakh crore under the Atmanirbhar scheme. Power Finance Corporation and Rural Electrification Corporation have so far sanctioned loans worth Rs 1.18 lakh crore to 19 discoms. Out of which, loans worth nearly Rs 31,100 crore have been disbursed to 11 states. Meanwhile, the power minister has assured to expedite the disbursement process with state governments now willing to provide the guarantee and budgetary support.