Minimum gencos of power, call for direct utility states to clear rents from coal companies

The power ministry has asked some states, including Uttar Pradesh, Tamil Nadu and Maharashtra, to direct their utilities to pay the total arrears to manufacturing companies (Gencos) and coal companies as failure to do so could affect power supply.

Union Power Secretary Alok Kumar has written to the chief secretaries of the states, including Uttar Pradesh, Tamil Nadu, Maharashtra, Rajasthan, Madhya Pradesh and the Union Territories of Jammu and Kashmir.

The letter, a copy of which was reviewed by PTI, urged the chief secretaries to instruct their state utilities to immediately clear the arrears of Gencos and coal companies, failing which the power supply in their state could be severely affected.

Kumar highlighted that the lack of adherence to basic payment disciplines by utilities is not only causing supply problems in power generation, but also adversely affecting new investments in the sector.

He said that public utilities have a high responsibility to be the master of standard pay and holder of contract law of the country, adding that repeated negligence on the part of utilities goes against the essence of these basic responsibilities.

If utilities continue to waive their obligations to pay their creditors on time and do not clear their past and present arrears on an urgent basis, it will have a dangerous effect on the power supply, he said.

The inability of utilities to pay legitimate arrears against transmitted electricity and received coal is raising unprecedented power supply concerns.

The arrears of Genco and Coal India Limited (CIL) have been a matter of serious concern for some time. This poses a threat to reliable power supply, the secretary noted.

According to the letter, Uttar Pradesh utility gencos and CIL have Rs 319.82 crore unpaid Rs 9,372.49 crore.
Tamil Nadu utility gencos and CIL Rs 729.60 crore unpaid Rs 20,842.53 crore. Maharashtra Utilities ’debt for gencos and CIL stood at Rs 2,573.19 crore per Rs 18,014.54 crore.

307.86 crore to Rajasthan Utility Gencos and CIL Rs 11,176.38 crore unpaid.
Madhya Pradesh utility gencos and CIL Rs 256.04 crore unpaid Rs 5,030.19 crore.
Unpaid Rs 7,275.12 crore to utility union territory gencos of Jammu and Kashmir.

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