Centre asks 6 states to clear dues to power stations, Coal India

“Lack of adherence to basic payment discipline by the utilities is not only causing supply side problems in generation of electricity, but is also adversely affecting new investment in the sector,” Secretary, ministry of power, Alok Kumar said in his letter to the states on Thursday.

New Delhi: As power demand peaks across the country, the Centre has asked six states to clear their dues or else be prepared to face shortages, sources said on Friday. Uttar Pradesh, Tamil Nadu, Madhya Pradesh, Jammu and Kashmir, Maharashtra, and Rajasthan have the highest dues among all the states to the power generation companies and to Coal India Limited, which supplies coal for the power plants.

“Lack of adherence to basic payment discipline by the utilities is not only causing supply-side problems in the generation of electricity but is also adversely affecting new investment in the sector,” Secretary, ministry of power, Alok Kumar said in his letter to the states on Thursday. “Public utilities have a higher responsibility to be ideal paymasters and upholders of contract laws of the country and that repeated indiscretion on part of the utilities goes against the very essence of these basic responsibilities,” he said.

According to data, Tamil Nadu is the biggest defaulter with Rs 20,842 crore dues to the power generation companies and owes Rs 700 crore to CIL. Maharashtra has Rs 18,000 crore dues to the generation companies and owes Rs 2,500 crore to CIL, while UP has dues of Rs 9,000 crore to power generation companies and owes Rs 300 crore to CIL. The power secretary’s letter comes days after Power Minister RK Singh had asked chief ministers of Haryana, Uttar Pradesh, Karnataka, and West Bengal to push coal imports for power generation companies. Singh had expressed concern that the tender process for coal import had either not started or not completed in the four states.

According to data, in 2018-19 a total of 21.4 million tonnes of coal was imported for blending. In 2019-20, the total import for blending was 23.8 million tonnes whereas, in 2021-22, it was only 8.3 million tonnes. The power ministry had also issued directions to all the generation companies that if the orders for import of coal for blending were not placed by May 31, and if the imported coal for blending purposes did not start arriving at the power plants by June 15, all the defaulter companies would have to import coal for blending purpose to the extent of 15 percent in order to meet the shortfall till October. These directives were issued keeping in mind that power demand is set to soar during the coming monsoon season.