BENGALURU: The Karnataka High Court directed all Escoms (electricity supply companies) and the state government to honour and discharge their obligations and liabilities under the Power Purchase Agreements (PPAs), including making payment of outstanding dues to power generators without delay, and to continue to make timely and prompt payments henceforth.
“All Escoms are also directed to forthwith open / renew monthly irrevocable letters of credit in terms of the PPAs in favour of power generators for the purpose of enabling and ensuring payments of all amounts due to power generators from the Escoms,” Justice SR Krishna Kumar said. A batch of petitions was filed by Renew Power Private Limited and other renewable energy generating companies, against the energy department, Escoms and state government. Directing Escoms to pay and clear all outstanding dues payable to the petitioners in relation to all the bills, the court asked the Registry to send a copy of the order to the Karnataka Electricity Regulatory Commission.
“It cannot also be gainsaid that Escoms collect and receive monies from consumers for the supply of energy generated by the petitioners and other power generating companies. It is, therefore, in public interest and in the interest of preserving energy reforms that necessary directions are to be issued to Escoms to abide by the terms of PPAs,” the court observed.
Meanwhile, counsel of the Escoms submitted that huge amounts due to the Escoms have not been paid by rural local bodies, urban local bodies, state government and also subsidy dues from farmers. This has resulted in the Escoms not being in a position to pay dues on time, he said.