Tangedco demanding interest waiver to release dues to generators: IWPA

The Indian Wind Power Association (IWPA) has said that Tamil Nadu government-owned electricity generation and distribution utility, Tangedco, is demanding waiver of accumulated interest to release its dues to electricity suppliers.

To supply electricity to consumers, Tangedco has its own generating stations and also buys power from independent power producers (IPPs) and from the power exchanges. Many of the IPPs are wind and solar companies.

Mounting overdues

Tangedco owes generators a lot of money. A recent report of the ratings-cum-analysis agency, ICRA, ranked the utility the highest among all those who ran huge overdues to power suppliers. It said Tangedco, on the average, overshot its payment deadline by 570 days.

And now, IWPA, an association of wind power generators, has written to the Chairman and Managing Director of Tangedco, PK Bansal, noting that in some cases dues were about three years. “You will appreciate that this type of arrears cannot be managed by any generator and all of them are in deep financial distress,” IWPA’s Chairman K Kasturirangaian, has said in the letter.

Waiver of interest demanded

Worse, Tangedco has been demanding that generators give an undertaking that they are wiling to forgo the accumulated interest on their dues if they want their dues to be released.

“A large number of our members have been writing to us that officials of Tangedco are directing them to provide ‘undertaking letters’ on stamp paper for waiver of all interest that has accumulated and, in some cases, have also sought for waiver of 2-4 per cent of principal sums due,” Kasturirangaian says.

This development has unfolded in the wake of the government of India opening the liquidity tap to State-owned discoms. Under the Atmanirbhar scheme of the government of India, the public sector lenders, REC and PFC have both provided funding to Tangedco — generators’ dues are to be settled at 1 per cent per month rate of interest.

IWPA notes that wind generators in the State have been supplying electricity for ₹2.14 a kWhr—a dream rate for purchase of power.

Business Line has confirmed with a few wind IPPs in Tamil Nadu that Tangedco has not paid them for the electricity supply for three years. Tangedco has not responded to Business Line’s request for its reaction to the IWPA letter.