Power Minister urges states to direct utilities to clear dues to gencos, coal firms

Union power secretary Alok Kumar has written to chief secretaries of several states to direct their generation and distribution companies to clear power and coal bills in order to prevent electricity supply getting affected.

Kumar said lack of adherence to basic payment discipline by state-owned utilities to power plants and coal companies was not only causing supply-side problems in generation of electricity, but also adversely affecting new investment in the sector.

He said the inability of the utilities to pay the dues was increasing the electricity supply-side concerns to unprecedented levels.

“The pending dues of generation companies and Coal India Ltd (CIL) have been a matter of grave concern for quite some time. This is posing a threat to reliable power supply,” Kumar wrote in separate letters to Uttar Pradesh, Tamil Nadu, Madhya Pradesh, Jammu & Kashmir, Maharashtra and Rajasthan.

Public utilities have a higher responsibility to be ideal paymasters and upholders of the contract laws of the country and repeated indiscretion on part of the utilities goes against the essence of basic responsibilities, Kumar said.

He added that if the utilities continued to renounce their responsibilities for timely payments to their creditors, and did not wipe out their past and current dues on an urgent basis, this would have a perilous effect on power supply.

Tamil Nadu’s distribution companies owe the highest amount at Rs 20,842 crore to generation companies. Its dues to Coal India stand at Rs 730 crore. Maharashtra distribution utilities owe Rs 18,015 crore to power plants and Rs 2,573 crore to Coal India. Rajasthan has outstanding payments of Rs 11,176 crore to power plants and Rs 308 crore to coal companies.