Tamil Nadu and Maharashtra are the top two states with respect to dues payable to discoms, according to information tabled in Parliament.
As of July 24, 2023, Tamil Nadu had current dues of Rs.5,118 crore – the highest among all states/UTs – followed by Maharashtra with Rs.2,713 crore and Karnataka with Rs.2,365 crore. (see table)
It was also informed in Parliament that with the implementation of Electricity (LPS and Related Matters) Rules, 2022, remarkable improvement has been seen in recovery of outstanding dues of suppliers including generating and transmission companies.
The total outstanding dues of states which were at Rs.1,39,747 crore as on June 3, 2022 (the date of implementation of LPS rules) reduced to Rs.69,957 crore as of July 24, 2023, after the payment of 12 equated monthly installments (EMIs). These due include those payable to transmission companies.
Distribution companies are also paying their current dues in time to avoid regulations under the rule.
LPS rules and regulations
On June 3, 2022, Government of India promulgated Electricity (Late Payment Surcharge and Related Matters) Rules, 2022. These rules entail obligations upon discoms to clear their legacy dues as existing on June 3, 2022, in a time bound phased manner in equated monthly installments with benefits of non-applicability of late payment surcharge after June 3, 2022.
These rules also provide framework for time bound clearance of current dues through establishment of a payment security mechanism and disincentives of progressive withdrawal of access as well as power regulations if the provisions of the rules are not followed. Discoms can avail loans from PFC and REC to clear their dues to generating companies.
Further, under the Revamped Distribution Sector Scheme (RDSS) launched by Government of India, compliance to LPS Rules by discoms has been prescribed under the Result Evaluation Framework for evaluating discoms for availing financial assistance under the scheme.
Gencos dues
As of April 2021, dues payable by discoms to generating companies (gencos) stood at Rs.83,161 crore. These rose to Rs.1,03,725 crore as of April 2022. As of June 3, 2022 (the date of implementation of LPS rules), these mounted further to Rs.1,20,540 crore only to drop significantly to Rs.61,025 crore, as of July 24, 2023, after the payment of 12 EMIs.