Significant Improvement in payment of GENCO dues with the implementation of Electricity (LPS and Related Matters) Rules, 2022 – EQ Mag

Total outstanding dues of States reduced by Rs. 24,680 Cr

DISCOMS pay almost Rs. 1,68,000 Cr of current dues in last 5 months

LPS Rules to bring back financial viability of the power sector and attract investment to ensure reliable 24×7 electricity to consumers

With the implementation of Electricity (LPS and Related Matters) Rules, 2022, remarkable improvement has been seen in recovery of outstanding dues of Suppliers including Generating Companies, Transmission Companies and Traders. The total outstanding dues of States which were at Rs. 1,37,949 Cr. as on 03.06.2022 have been reduced by Rs. 24,680 Cr. to Rs. 1,13,269 Cr. with timely payment of just four (4) EMIs. For payment of EMI of Rs. 24,680 Cr, 5 States have taken loan of Rs. 16,812 Cr. from PFC & REC and 8 States have opted to make their own arrangement.

Distribution companies are also paying their current dues in time to avoid regulations under the rule. Distribution companies have paid almost Rs. 1,68,000 Cr. of current dues in last 5 months.

Presently, only one distribution utility i.e. JBVNL is under regulation for non-payment of current dues. Outstanding dues of distribution companies on trigger date have been reduced to Rs. 205 Cr. from Rs 5085 Cr. as on 18.08.2022.

Based on the results achieved so far, it is expected that strict implementation of the LPS Rules will bring back financial viability of the power sector in the country and would attract investment to ensure reliable 24×7 electricity to the consumers. This Rule has not only ensured that the outstanding dues are liquidated but has also ensured that the current dues are paid in time. It may be seen that the Rule has played a vital role in ensuring the financial discipline in Discoms.