Private power producers write to Union Minister against Tangedco

The Association of Power Producers has written to Union Minister of State for Power R.K. Singh, alleging that Tangedco is forcing independent power producers to accept huge discounts on late payment surcharge dues and pending fixed charges.

In its letter, the Association said it was informed by its members who supply power to Tangedco that the State utility was trying to arm-twist them into accepting huge discounts of 50% on late payment surcharge dues and a 20% discount on pending fixed charges.

Some of the companies which supply power to Tangedco include Jindal Power Limited, KSK Mahanadi, Adhunik and DB Power. To ease the financial stress in the power system amid the COVID-19 pandemic, the Union Ministry of Power had advised the generating companies and the transmission companies to charge a late payment surcharge at a rate not exceeding 12% a year (simple interest) for all payments made under the Liquidity Infusion Scheme of the Power Finance Corporation (PFC) and REC Ltd. under Atmanirbhar Bharat.

The Ministry noted that late payment surcharges in many cases ranged up to 18% a year, and it was quite high despite the fact that interest rates in the country had softened over the last few years.

Ministry’s stipulations

The Association said Tangedco’s demand came despite all the independent power producers concerned having agreed in writing to abide by the Ministry’s stipulations on the late payment surcharges for funds disbursed under the Liquidity Infusion Scheme for distribution companies.

It also alleged that since the producers refused to provide discounts, Tangedco recommended payment of dues under the Liquidity Infusion Scheme only to the Central generating stations and a few small renewable energy generators. It said a similar issue in Uttar Pradesh was sorted out with the intervention of the Union Ministry of Power. It sought the Ministry’s urgent intervention in Tamil Nadu to ensure that no additional discounts were sought besides the Ministry’s stipulations.

The Association also requested the Ministry to direct PFC and REC Ltd. to insist on an non-discriminatory access to the liquidity window funds and not release funds in part as it would put more pressure on the independent power producers, who are refusing to accept Tangedco’s demand.

A senior Tangedco official said he was not aware of such a letter.

(With inputs

from R. Srikanth)

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Printable version | Jan 19, 2021 5:39:56 AM |

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