BHUBANESWAR: The Ministry of Power making it mandatory for power distribution licensees to open and maintain adequate letter of credit (LoC) as a payment security mechanism under power purchase agreements (PPAs) from August 1, the State with an outstanding dues of about Rs 590 crore is likely to face power regulation from Central power generating companies.
In a recent communication to the state government, the Power Ministry has directed national, regional and state-level load despatch centres (LDCs) to schedule electricity from only those plants that have secured letters of credit from distribution companies against the supply.
“In case of non-maintenance of adequate letter of credit or advance payment with respect to the generating station by the distribution company, the power supply from the generating station shall not be scheduled by the appropriate load despatch centre to the distribution company,” the order said.
The Ministry has further asked power plants to intimate load despatch centres every morning about the status of bank guarantees.
The centres will then issue a list of power plants that are not being scheduled due to non-payment of letters of credit. Electricity despatch to a discom shall stop once the quantum of electricity under its letter of credit is supplied.
The load despatch centres have been asked to ensure that distribution companies (Discoms) failing to provide letters of credit in favour of generators will not only be denied scheduled power but also access to spot markets.
According to PRAAPTI (Payment Ratification and Analysis in Power procurement for bringing Transparency in Invoicing of generators) portal of the Power Ministry which provides legacy data on outstanding amounts of Discoms against power purchase, an amount of Rs 590 crore is overdue to Central power generating companies for 692 days.
Disputing the Power Ministry’s claim, Gridco, the bulk purchaser of power for the State, said the State PSU has current outstanding of only Rs 68 crore.
“Gridco has nothing to worry as it has opened letter of credit against all Central power generating and transmitting agencies,” highly placed sources in the company said.
The sources said the state power trading utility is maintaining bank guarantee of Rs 84.65 crore to cover payment due of National Thermal Power Corporation (NTPC), Rs 44 crore for Power Grid Corporation of India Limited (PGCIL), Rs 11.43 crore for National Hydro Power Corporation and Rs 8.18 crore against NTPC Vidyut Vyapara Nigam Limited (NVVNL).
“The outstanding dues reflected in the Ministry’s portal is a disputed amount for which Gridco has moved the Supreme Court and won the case,” Gridco said.
