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After implementation of the Electricity (LPS and Related Matters) Rules, States and union territories have paid outstanding power dues of ₹47,317 crore since June 2022, the Parliament was informed on Thursday.
“With the implementation of Electricity (LPS and Related Matters) Rules, 2022, remarkable improvement has been seen in recovery of outstanding dues. Against legacy dues of ₹1,38,378 crore as on June 3, 2022, 13 States and UTs have paid installments of ₹47,317 crore (8 EMIs). Further, 20 States/UTs reported to having no outstanding dues as on June 3, 2022,” Power Minister RK Singh said in response to a query in Lok Sabha.
As of February 2023, the balance legacy dues (after payment of 8 EMIs) stood at ₹91,061 crore, while the current dues (excluding disputed and before default trigger date) are ₹28,449 crore, as per the data provided by the minister in the lower house.
The implementation of late payment surcharge (LPS) rules has led to an improvement in recovering outstanding dues of suppliers including gencos, transmission companies and traders.
Improving finances
Singh pointed out that recognising the cash flow problems arising out of outstanding receivables of gencos from discoms and in order to increase basic payment discipline in the power sector value chain, sustenance of which has been matter of concern due to increasing receivables to Gencos, the Centre promulgated the LPS rules on June 3, 2022.
“These rules entail obligations upon the 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,” he added.
These rules also provide a framework for time-bound clearance of current dues through establishment of a Payment Security Mechanism (PSM) and disincentives of progressive withdrawal of open 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 gencos, Singh explained.
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