Power Min urges states to direct utilities to pay arrears to coal companies

The power ministry has asked some states, including Uttar Pradesh, Tamil Nadu and Maharashtra, to direct their utilities to pay the total arrears to manufacturing companies (Gencos) and coal companies as failure to do so could affect power supply.

Union Power Secretary Alok Kumar has written to the chief secretaries of the states, including Uttar Pradesh, Tamil Nadu, Maharashtra, Rajasthan, Madhya Pradesh and the Union Territories of Jammu and Kashmir.

The letter, a copy of which was reviewed by PTI, urged the chief secretaries to instruct their state utilities to immediately clear the arrears of Gencos and coal companies, failing which the power supply in their state could be severely affected.

Kumar highlighted that the lack of adherence to basic payment disciplines by utilities is not only causing supply problems in power generation, but also adversely affecting new investments in the sector.

He said that public utilities have a high responsibility to be the master of standard pay and holder of contract law of the country, adding that repeated negligence on the part of utilities goes against the essence of these basic responsibilities.

If utilities continue to waive their obligations to pay their creditors on time and do not clear their past and present arrears on an urgent basis, it will have a dangerous effect on the power supply, he said.

The inability of utilities to pay legitimate arrears against transmitted electricity and received coal is raising unprecedented power supply concerns.

The arrears of Genco and Coal India Limited (CIL) have been a matter of serious concern for some time. This poses a threat to reliable power supply, the secretary noted.

According to the letters, utilities in Uttar Pradesh owed Rs 9,372.49 crore to Genco and Rs 319.82 crore to CIL.
Tamil Nadu Utilities owes Rs 20,842.53 crore to Gencos and Rs 729.60 crore to CIL. Maharashtra’s utility arrears are Rs 18,014.54 crore to Genco and Rs 2,573.19 crore to CIL.

Rajasthan Utilities owes Rs 11,176.38 crore to Gencos and Rs 307.86 crore to CIL.
Utilities in Madhya Pradesh owes Rs 5,030.19 crore to Gencos and Rs 256.04 crore to CIL.
The Union Territory of Utilities in Jammu and Kashmir owed Rs 7,275.12 crore to Jenkos.

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