Total Outstanding Dues of State Power DISCOMs Reduced By Half in a Year

Tamil Nadu has the highest balance of outstanding dues, amounting to ₹125.6 billion


The Union Minister of New Renewable Energy and Power, R. K. Singh, in a written reply to Lok Sabha, stated that the effective enforcement of the Electricity (LPS and Related Matters) Rules in 2022 has led to a notable enhancement in the recovery of outstanding dues owed to suppliers, which includes generating and transmission companies.

The total outstanding dues of states was ₹1.39 trillion (~$16.9 billion) as of June 3, 2022. However, through the timely payment of twelve equated monthly installments (EMI), this amount has been substantially reduced to ₹699.6 billion (~$8.5 billion) as of July 2023.

As of July 24, 2023, Tamil Nadu leads with the highest balance of legacy dues (outstanding dues), amounting to ₹125.6 billion (~$1.5 billion) after completing 12 EMIs. The current dues of the state is  ₹51.2 billion (~$622.2 million).

Maharashtra closely follows Tamil Nadu with a balance of legacy dues standing at ₹125.9 billion (~$1.5 billion) after the 12th EMI and current dues of ₹27.1 billion (~$329.9 million).

Karnataka’s outstanding dues include a balance of ₹96.5 billion (~$1.2 billion) after 12 EMIs and current dues of ₹23.6 billion (~$286.9 million).

In Rajasthan, the balance of legacy dues after 12 EMIs is ₹84.5 billion (~$1.03 billion), and the current dues are ₹17.1 billion (~$207.9 million).

Lastly, Jammu and Kashmir have a balance of legacy dues totaling ₹63.7 billion (~$774.5 million) after 12 EMIs, and current dues amounting to ₹4.3 billion (~$52.3 million).

In response to the cash flow challenges arising from outstanding receivables of generating companies from DISCOMs, the Government took decisive action to promote payment discipline within the power sector value chain by introducing the late payment surcharge rules.

Under these rules, DISCOMs must clear their legacy dues that existed on June 3, 2022, in a time-bound, phased manner through equated monthly installments. Implementing these rules brings the advantage of non-applicability of late payment surcharges after the specified date.

Furthermore, the rules outline a comprehensive framework for promptly clearing current dues by establishing a Payment Security Mechanism. To encourage compliance, the rules include disincentives such as progressive withdrawal of access and potential power regulations in case of non-adherence. To facilitate the settlement of dues to generating companies, DISCOMs can avail of loans from PFC and REC.

Singh also stated that there is adequate availability of electricity in the country. There is a negligible gap between energy requirement and energy supplied on account of factors attributable to DISCOMs, such as constraints in distribution network, financial constraints, commercial reasons, etc.

The all-India power supply position for the fiscal year 2022-23, the energy supplied further rose to 1,511,847 MU, against the energy requirement of 1,504,264 MU, resulting in a surplus of 7,583 MU. The percentage of energy not supplied marginally increased to 0.5%.

As for the current year, up to June 2023, the total energy supplied stands at 4,08,621 MU, while the energy requirement is 4,07,762 MU, leaving a surplus of 858 MU. The percentage of energy not supplied is relatively low at 0.2%.

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