Outstanding power sector dues of States decline by ₹24,680 crore

The DOE said on Wednesday that the introduction of the Late Payment Surcharge (LPS) rules has led to an improvement in recoveries of outstanding dues to suppliers including Gencos, carriers and dealers with fees reduced by Rs 24,680 crore.

The ministry said in a statement that with the application of the Electricity Rules (LPS and related matters), 2022, a remarkable improvement was observed in recovering dues owed to suppliers including generation companies, transmission companies and merchants.

“Total payables to states which were at ₹1,37,949 crores as on 3rd June 2022, have been reduced by ₹24,680 crores to ₹1,13,269 crores with the timely payment of four EMI vouchers to pay off the EMI of 24,680 crore, five states took out loans worth Rs 16,812 crore from PFC and REC and eight states chose to make their own arrangements.”

current dues

Discoms also pay their current dues in a timely manner to avoid regulations by law. They have paid approximately Rs 1,68,000 crore current dues in the last five months.

At present, only one distribution facility – JBVNL (Jharkhand Bijli Vitran Nigam) – is regulated for non-payment of current dues. The ministry indicated that outstanding dues for disturbances on the start-up date were reduced to ₹205 crore from ₹5,085 crore as on 18 August 2022.

Financial validity

Based on the results achieved so far, strict enforcement of LPS rules is expected to restore the financial viability of the power sector in the country and will attract investment to ensure 24/7 reliable electricity supply to consumers. These rules ensured not only the liquidation of outstanding receivables but also the timely payment of current receivables. It can be seen that Al Qaeda played a vital role in ensuring fiscal discipline in the turmoil.”