According to latest information available on the government portal PRAAPTI, the total dues of state government-owned power distribution companies as of July 31, 2020 was nearly 37 per cent higher than the comparable level in 2019.
The government portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators, www.praapti.in) in its latest update shows that the total amount payable by discoms to power generators was Rs.1,29,433 crore, as of July 31, 2020. This was 36.7 per cent higher than the comparable level of Rs.94,658 on July 31, 2019.
This is clearly indicative of financial stress of discoms, which has been exacerbated by the COVID-19 situation. It may be mentioned that the government in May 2020 announced a Rs.90,000 crore relief package to discoms, which would be in the form of concessional loans available from financing institutions, PFC and REC. This volume of relief is likely to be increased to Rs.1,20,000 crore by the end of September 2020.
Coming back to the statistics, here are some interesting observations:
- The amount billed to discoms in July 2020, at Rs.15,014 crore, was in fact 24.4 per cent lower than the Rs.19,850 billed in July 2019. This only suggests that tariffs have been lower in 2020 and also, the quantum of power purchased is lower, thanks to demand side management practices.
- In July 2020, discoms made a total payment of Rs.15,708 to power generators. This was 6 per cent higher than the Rs.14,815 crore paid in July 2019.
- What is interesting to observe is that in July 2020, nearly 90 per cent of the payments made by discoms to generators was towards clearing overdue amounts. Only less than 10 per cent was made towards clearing of outstanding (but not overdue) amounts. An outstanding amount of more than 60 days is considered overdue, on which generators are allowed to charge interest.
- In July 2019, on the other hand, a much lesser 64 per cent of the total payment was towards overdue amounts.
- This clearly shows that there is a pile-up of overdue amounts. Discoms are currently only clearing overdue amounts, and with the passage of time, outstanding amounts are graduating to overdue amounts.
- This “overdue” trap is getting mitigated to some extent only by lower billings. Industry experts also believe that discoms are making spot purchases from power exchanges and saving enormously on their power purchase bill. It is an established fact that electricity prices on power exchanges are much lower than PPA-bound tariffs.
- The relief obtained by lower billing can be best understood with the following observation. The total outstanding (but not overdue) amount payable by discoms to power generators was Rs.12,676 crore as of July 31, 2020. This was indeed 34.3 per cent lower than the comparable level of Rs.19,306 crore on July 31, 2019. This means that there is relatively less stress on the “outstanding dues” side.
- Going by current trends of significant electricity purchase on exchanges by discoms and muted demand due to DSM practices, the amount billed by generators would see a generally declining trend. This would form the basis for discoms to be able to clear a higher proportion of their overdue amounts.
- Of the total dues (outstanding plus overdue) of discoms to power generators, Central power gencos had the highest share of 39.2 per cent, as of July 31, 2020. This category of generators was followed by IPPs with 31.5 per cent, state government power producers with 20.8 per cent and by renewable energy generators with 8.5 per cent. (Outstanding has been denoted as “O/S” in the above table.)
Featured photograph shows the Mahan power plant of Essar Power in Madhya Pradesh. IPPs accounted for 31.5 per cent of the total outstanding payment of discoms to power generators, as of July 31, 2020. The comparable proportion in 2019 was 26.3 per cent.
