TANGEDCO dues: Power producers warn of blackout

CHENNAI: Tamil Nadu Generation and Distribution Company Limited (TANGEDCO) owes approximately `20,899 crore to thermal power producers, who have threatened power cuts during the poll season if the payment commitments are not met soon.

A letter to Tangedco Chairman Pankaj Bansal by the Association of Power Producers (APP) urges settlement of the dues at the earliest. “Given the impending elections in Tamil Nadu, our members are keen to ensure uninterrupted power supply to TANGEDCO without resorting to invocation of Letter of Credit or reporting the matter to Power System Operation orporation Limited, to avoid undesirable consequences,” says APP director general Ashok Khurana.

Tangedco had released the pending payment to renewable energy producers but is yet to pay thermal power producers. A Tangedco official told Express that they are  aware of the demand and it is being looked into. While officials refused to give any time frame, a member of APP told Express that the delay is affecting back-to-back obligations pertaining to plant operations, debt servicing and other  lender-related issues.

“The entire thermal power industry is presently going through a very difficult and challenging phase where many companies are struggling to meet the above obligations in view of long-pending dues of the discom,” he added. It is learnt that discoms have to settle their dues in 45 days for electricity supplied by independent power producers. After that, outstanding dues become overdue and generators charge penal interest on that in most cases.

To give relief to power generation companies, the  Centre enforced a payment security mechanism from August 1, 2019. Under this, discoms are required to open letters of credit for getting power supply. Discoms in Rajasthan, Uttar Pradesh, Jammu  & Kashmir, Telangana, Andhra Pradesh, Karnataka, Maharashtra,  Jharkhand, Haryana and Tamil Nadu account for the major portion of dues to power generation companies, according to the data from Union Power Ministry’s PRAAPTI (Payment Ratification and Analysis in Power Procurement for bringing Transparency in Invoicing of Generators) portal.