The electricity distribution companies mostly run by states owe power generating companies over Rs 96,000 crores as of November 2021. CNBC-TV18 learns that the association of power producers’ (APP) has sought immediate intervention from the Power Ministry to find a solution for the sustainability of current and prospective investments.
The association of power producers met power minister RK Singh on Monday in the presence of Power Secretary Alok Kumar and representatives from Power Finance Corporation (PFC) and Rural Electrification Corporation (REC).
The state-run discoms owe over Rs 51,000 crore to the private power generating companies and almost Rs 20,000 crore dues are pending for the renewable energy generating companies. The channel has learned the association raised the issue of delayed payment by discoms and reiterated that there needs to be a solution for sustaining investments made in the power sector. It also highlighted that the delayed payment can potentially jeopardize existing and prospective investments.
“There is a need to make current investments sustainable and the investors need to remain interested in the power sector. There needs to be a framework devised by the government to ensure electricity generators are paid in time for the power sold. There is a need to generate positive sentiment for further investments. The vicious circle of delayed payment needs to be broken to a virtuous cycle, the current position on investment is unsustainable,” AK Khurana, DG, Association of Power Producers said.
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The association has also apprised the ministry that private power companies are at a stage where it needs to issue notices for regulation of power. Meanwhile, the ministry urged companies to enforce payment security mechanisms.
Some of the states with high overdue include Tamil Nadu, Maharashtra, Rajasthan, Uttar Pradesh, Madhya Pradesh, and Karnataka. Total overdue from the discoms to the power generating companies at the start of November 2021 stood at Rs 96,170 crore.