UPPCL struggles to pay dues to power generating companies

The UP Power Corporation Ltd (UPPCL) has tripped, yet again, on the payment of electricity bills to the power generating companies even as it is flexing muscles to wrest its own power dues from the consumers.

The cash-strapped corporation is understood to have around Rs 10,000 crore outstanding dues pending against it with the generating companies demanding payment for the electricity that they have already sold to the state-owned utility.

The NTPC, NHPC, Reliance, Bajaj and the Utpadan Nigam are among the major suppliers of electricity to the UPPCL and they all have power dues pending against the corporation, since March 2017 in some cases.

“No doubt, a weak financial position of the UPPCL often comes in the way of our making regular payments to the generating companies,” UPPCL chairman and principal secretary, energy, Alok Kumar said, adding “This is why we are making all efforts, including recovering old dues and curbing power theft to improve the financial health of the department.”

Sources in the UPPCL said the UP Rajya Vidyut Utpadan Nigam alone had nearly Rs 7,000 crore pending as dues against the UPPCL. “Since the Utpadan Nigam is a government-owned corporation, it does not make a hue and cry over dues and gets satisfied with as much payment as necessary for purchase of coal, oil etc,” they said.

Among others, the Bajaj Energy Ltd (BEL) is the major generator in terms of dues against the UPPCL. Details available with the UPPCL show the BEL that supplies electricity from the 1980 MW Lalitpur thermal plant and some other sources has around Rs 2000 crore outstanding against the UPPCL of which half the dues are pending over 60 days.

Similarly, the Reliance Energy Ltd (REL) has around Rs 150 crore outstanding, NTPC around Rs 1500 crore and NHPC around 350 crore dues against the UPPCL. The generators, according to sources, keep on requesting the UPPCL to liquidate the dues citing their difficulties in running the plants.

The BEL, for example, in a letter to the UPPCL management on January 12 said, “We are facing liquidity crunch due to insufficient payments from the UPPCL against the monthly bills, as a result of which the BEL is handicapped in procuring sufficient coal to run the plant at its full capacity and is also unable to pay back the legitimate dues to the lenders.”

According to sources 80% of the revenue that the UPPCL earns is spent on purchase of electricity that is further supplied to consumers against the retail tariff determined by the regulator differently for different categories. “But a gap of Rs 0.80 in the average cost of supply and average revenue realization due to high aggregate technical and commercial losses, a large part of it being power theft, leaves the UPPCL with a huge deficit every year hampering its capacity to make regular payment to the generating companies,” explained sources.