Power producers seek clearance of Rs 3,184-crore dues from Madhya Pradesh discoms

Stating that it is becoming difficult to sustain operations without receiving payments for past dues, independent thermal power producers have written to the head of Madhya Pradesh’s state-run power distribution companies (discoms) seeking immediate release of “at least 70% of the outstanding payment”. According to the Union power ministry’s ‘Praapti’ portal, overdues — pending receivables for 60 days or more —private power plants at July-end was at Rs 1,861 crore, up from Rs 515 crore a year ago.

Separately, complaining about non-payment of bills the state discom for more than a year, wind power developers supplying electricity to the state have requested chief minister Shivraj Singh Chouhan to intervene in the matter. The ‘Praapti’ portal shows overdues of renewable energy players from MP discoms to have spiralled to Rs 1,323 crore as of end-July from Rs 537 crore a year ago.

In a letter written to Akash Tripathi, managing director of state-run Madhya Pradesh Power Management Company (MPPMCL), the Association of Power Producers (APP) said that the cash is needed to procure coal through advance payment, “and failure to do so leads to lapsing of coal quantity and levy of heavy penalties, thereby leading to the high possibility of disruption in power supplies”.

The power producers want the payment at a time when more than 95,500 mega-watt (MW) of power plants across the country have fuel stocks to last for less than eight days. As on August 26, more than 6,500 MW of generating capacity were already shut down, citing ‘coal shortage’. This caused massive power supply shortage of 77.7 million units (MU) on August 28, of which 25.9 MU shortage was reported from Madhya Pradesh itself.

Deprived of bill payments from MPPMCL for more than a year, wind power developers supplying electricity to the state have requested the state’s chief minister Shivraj Singh Chouhan to intervene in the matter, and clear the dues at the earliest. “Non-payment by MPPMCL has consecutively resulted in overdue of loan repayments which have not only burdened the projects with penal interests but this situation also threatens many wind energy generators to be declared as a non performing asset,” the letter addressed to Chouhan from Indian Wind Power Association, reviewed by FE, stated. The industry had also written to the chief minister earlier in August, intimating about the irregularities in payment and seeking his intervention.

Madhya Pradesh’s overdue to independent power players comprise about 3% of the receivables owed to private generators across the country. However for renewable energy, the dues constitute about 10% of the overall receivables of the country’s green power plants. Irregular payments to renewable energy based power producers has been cited as one of the main roadblocks which can potentially impede the growth of the major FDI-earning sector in the country. There are around 2,520 MW of wind power plants currently in the state, which has a potential to accommodate more than 15,000 MW of wind assets.