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Even as the Centre has announced a fresh Rs 90,000-crore package by PFC-REC to the state-run power distribution companies, Uttar Pradesh’s outstanding dues to electricity generating companies (gencos) have kept on piling.
As on April 2020, the state discoms have accumulated pending bills to the tune of Rs 32,000 crore to gencos, as against a total of Rs 17,500 crore owed by them in March 2019, reflecting a severe stress in the sector.
Of the Rs 32,000 crore, state generating companies’ dues stand at Rs 9,859 crore, those of IPPs at Rs 9,700 crore and of Central generating companies at Rs 6,500 crore. The Central transmission owes the discoms Rs 1,200 crore while the state transmission owes Rs 3,700 crore. Apart from this, the renewable energy producers have pending bills of Rs 1,050 crore.
The discoms’ overdues  — bills that remained unpaid for more than 60 days —  have been rising relentlessly. According to sources, among the IPPs, Lalitpur Power Generating Co has the maximum dues, worth Rs 3,000 crore, followed by NTPC, at Rs 2,900 crore.
The rise in overdues in April is being seen as a direct outcome of the lockdown imposed due to coronavirus pandemic, as it has adversely impacted the electricity demand and the revenues and cash collections for the discoms.
“The lockdown has resulted in a massive dip in power demand. Since the maximum demand fall has come from industrial and commercial establishments which pay higher tariffs, the blow has been very hard. To add to that is the fact that collections from power sold has not been more than 10-20 per cent as it has been difficult to continue meter reading exercises and collect payments from consumers amid the country-wide lockdown. These factors have aggravated the payment delays to generation companies,” said an official.
The present financial mess has arisen singularly due to the failure of the UPPCL to adhere to the minimum performance standards it had promised to achieve for availing of the benefits of the financial bailout package UDAY (Ujjwala Assurance Discom Assurance Yojna). Under UDAY, debt servicing obligation of the 50 per cent loans of the UPPCL and its five subsidiaries up to September 2015 were taken over by the UP government, thus enabling the power utility to contract fresh loans.
As per the tripartite MoU signed  in January 2016 by the  UP government, UPPCL and the Union Ministry of Power, the power utility was required to bring down the transmission and  distribution loss to 14.86 per cent by the end of March 2019. The MoU said, “If the target is not achieved then the discoms shall strive to achieve   it in subsequent year so as to achieve the target of 14.86 per cent positively by the end of March 2020.”
However, as per the annual revenue requirement (ARR) filed with power regulator UP Electricity Regulatory Commission, UPPCL has shown lines losses of 17.9 per cent during 2020-21.
As per the UDAY scheme, all discoms were required to eliminate the gap between the average cost of supply (ACS) and average revenue realised (ARR) by the end of March 2019. UPPCL had promised the eliminate the gap by the end of March 2019. UPPCL had assured to eliminate the gap positively by the end of March 2020 but it failed to honour its legal obligation and the gap between ACS and ARR remains 70 paisa per unit.