Discom dues fall to ₹3,300 crore from ₹1.39 trillion: Shripad Yesso Naik

Outstanding dues of power discoms fall to Rs 3,300 crore from Rs 1.39 lakh crore in 2022, aided by LPS rules and reforms to improve financial health of utilities

The outstanding legacy dues of power distribution utilities have come down to ₹3,300 crore at present from ₹1.39 trillion in June 2022, Minister of State for Power and New and Renewable Energy Shripad Yesso Naik informed Parliament on Thursday.

 

The improved financial position of discoms is a result of distribution reforms, including the implementation of the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022.

 

The rules state that all dues owed to generating companies, including independent power producers, central public sector enterprises and renewable energy developers, traders and power transmission companies, including late payment surcharges, accrued up to June 3, 2022, were classified as legacy arrears.

 

“These arrears were required to be rescheduled, with distribution licensees paying them in equated monthly instalments (EMIs),” Naik said. The rules provide a framework for the time-bound clearance of current dues, he added.

 

One discom each in Maharashtra and Tamil Nadu, and four out of five discoms in Karnataka have outstanding legacy dues. Naik said the major reasons for delay in payments by discoms are regulatory disallowance of expenses incurred by them; continued gap between average cost of supply and average revenue realised; and delayed receipt of subsidy and government department dues from state governments.

 

For improving the financial health of the distribution utilities, the government has also issued rules for the implementation of fuel and power purchase cost adjustment (FPPCA) and cost-reflective tariffs to ensure that the cost of supply of electricity is passed through.

 

The government has also launched the Revamped Distribution Sector Scheme (RDSS) in 2021, wherein works amounting to ₹2.83 lakh crore have been sanctioned for loss reduction and smart metering, Naik said. Other measures include timely payment of dues through LPS Rules, additional borrowing consent of 0.5 per cent of GSDP to state governments, and additional prudential norms for sanctioning of loans to state-owned power utilities.

 

He also said Ujjwal DISCOM Assurance Yojana (UDAY) was launched in November 2015 for the operational and financial turnaround of distribution utilities through financial restructuring. Twenty-seven states and five Union Territories signed MoUs under the scheme.