Power producers' total dues owed by distribution firms rose over 37 percent year-on-year to Rs 1.33 lakh crore in August 2020, reflecting stress in the sector. According to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators), distribution companies (discoms) owed a total of Rs 96,963 crore to power generation firms in August 2019. The portal was launched in May 2018 to bring in transparency in power purchase transactions between the generators and discoms.
In August 2020, the total overdue amount, which was not cleared even after 45 days of grace period offered by generators, stood at Rs 1,20,439 crore, as against Rs 78,646 crore in the year-ago period. According to the latest data on the portal, total outstanding dues in August increased on month-on-month basis as well. In July 2020, total outstanding dues of discoms stood at Rs 1,30,452 crore. The overdue amount in August 2020 has increased from Rs 1,17,637 crore in July 2020. Power producers give 45 days to discoms for paying bills for the supply of electricity. After that, outstanding dues become overdue and generators charge penal interest on that in most cases.
In order to give relief to power generation companies (gencos), the Centre enforced a payment security mechanism from August 1, 2019. Under this mechanism, discoms are required to open letters of credit for getting power supply. The central government had also given some breathers to discoms for paying dues to power generating companies (gencos) in view of COVID-19-induced lockdown. The government had also waived the penal charges for late payment of dues in the directive.
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