New Delhi, May 25 (FN Agency) Power ministry is working on a monthly instalment scheme to help distribution companies (discoms) to clear over Rs 1 lakh crore of dues to power generating companies (gencos), an official statement said on Wednesday. “The proposed scheme enables payment of financial dues in easy instalments by the discoms,” Power Ministry said. As per the plan, a one-time relaxation is being considered to be given to all the discoms wherein the amount outstanding (including principal and Late Payment Surcharge or LPSC) on the date of notification of the scheme will be frozen without further imposition of LPSC. The discoms will be given flexibility to pay the outstanding amount in upto 48 instalments. The liquidation of outstanding dues in deferred manner without imposition of LPSC will give discoms time to shore up their finances. At the same time, the generating company will benefit from assured monthly payments which otherwise were not forthcoming to them.
“However, in case of delay in payment of an instalment by a discom, the Late Payment Surcharge shall be payable on the entire outstanding dues which otherwise was exempted,” Power Ministry said. The Ministry noted that as a result of the proposed scheme discoms will save Rs 19,833 crore on LPSC in the next 12 to 48 months. “States like Tamil Nadu and Maharashtra who have large outstanding dues will save over Rs 4,500 crore each as a result of this measure,” the Ministry said. Uttar Pradesh is expected to save around Rs 2,500 crore while states like Andhra Pradesh, Jammu & Kashmir, Rajasthan and Telangana will save in the range of Rs 1,100 crore to Rs 1,700 crore. “The saving by discoms will ultimately benefit the electricity consumer by reducing the burden of LPSC in the retail tariff.
The measure is expected to provide timely liquidation of arrears which is very much important to the generating companies than the amount foregone on LPSC. At the same time, suitable measures are being put in place to ensure that discoms pay their dues to gencos on a regular basis otherwise supply by gencos will be reduced,” Power Ministry said. As per official data, discoms owed Rs 1,00,018 crore to gencos as on 18th May 2022. Late Payment Surcharge (LPSC) is levied on the payment outstanding by a discom to a genco at the base rate (pegged to SBI’s Marginal Cost of Lending Rate). LPSC is applicable for the period of default at base rate for the first month of default and increased by 0.5% for every successive month of delay, subject to a maximum of 3% over base rate at any time.