The renewable energy companies in Tamil Nadu are facing a peculiar situation where they are asked to pay their dues (deposits) to the Tamil Nadu Generation and Distribution Company (Tangedco) within 15 days, when the state utility itself has not paid its dues to the companies for over a year.
Renewable energy companies sell the electricity they produce to Tangedco and/or to other consumers. At present, they are not allowed to sell the power to consumers outside the State. Tangedco charges renewable energy companies on various counts, such as for wheeling and transmitting energy and ‘operations and maintenance’. The agreement that Tangedco has with the RE companies allows the utility to collect a security deposit equal to three months charges’ in advance.
The electricity generation and distribution utility is in poor financial health. According to official estimates, the State power utility is losing over Rs 9,741 crore a year, its accumulated losses as of March 2012 was Rs 50,000 crore, it owes Rs 45,000 crore to banks and lenders and over Rs 11,000 crore to suppliers and power companies.
Tangedco has not paid many suppliers of electricity for well over a year. “But it asks the same companies to pay up their deposits within 15 days,” says Mr P. Krishnakumar, Managing Director, Orient Green Power Ltd.
Although this situation has been there for long, it has become critical now both because the dues from Tangedco have mounted to such an extent as to threaten the sustainability of the power producers, as well as because the charges have been hiked very stiffly from April 1.
The long term open access transmission charges from Rs 2,781 per MW per day to Rs 6,483 per MW per day (133 per cent); and short term open access transmission charges from Rs 28.96 per MWh to Rs 270.11 — nearly 10 times. Alongside, the State has also increased the ‘scheduling charges’ for wind power units by 20 paise a unit.
The ‘three months’ security deposit’ has, therefore, become a big amount — and as such, has begun to bite.
The ‘dues from’ RE companies could be adjusted against ‘dues to’, but Tangedco says no. “When we point out to them their own dues to us, they say the two are separate issues,” says Mr G. Suresh, President, Biomass Power Producers Association.