Minister advises developers to turn to court to secure clean energy monies owed by electric utilities

Share

Minister for power and new and renewable energy RK Singh has told frustrated renewable energy project developers they can take action through the National Company Law Tribunal to recover unpaid dues amounting to Rs5,355 crore owed them by electricity distribution companies.

The minister warned seven states, including the solar-rich regions of Maharashtra and Karnataka, cash-strapped clean energy developers could default on their own payment obligations and could turn to the tribunal to force utilities to pay up.

As of July 31, renewable energy generators were owed almost Rs8,232 crore by power distribution companies (discoms) with Andhra Pradesh topping the list of shame, with an unpaid discom bill of Rs2,000 crore, followed by Tamil Nadu (Rs1,893 crore) and Telangana (Rs1,565 crore).

According to official data cited in The Economic Times newspaper, the dues owed by other states included Karnataka, with a Rs737 crore liability, Madhya Pradesh (Rs734 crore), Maharashtra (Rs574 crore), and Rajasthan (Rs478 crore). The discoms of Karnataka and Andhra Pradesh also reportedly owe Rs112 crore and Rs243 crore, respectively, to the Solar Energy Corporation of India.

Pay up

In a letter to the chief ministers of the seven late paying states, Minister Singh urged them to issue directives for immediate payment.

The financial travails of discoms have been a persistent obstacle to the country’s ambitious renewable energy dreams. The federal government has repeatedly taken measures to ensure timely payment to developers but dues continue to mount. In June, the national government made it mandatory for state discoms to offer letters of credit as part of the payment security mechanism associated with power purchase agreements.

The Central Electricity Authority last month asked developers to provide details of the monies they were owed in a bid to compile a comprehensive database of the situation.

Constituted in 2016, the National Company Law Tribunal is a quasi-judicial body that adjudicates issues relating to Indian companies, including proceedings relating to arbitration, compromise, arrangements and the reconstruction and winding up of companies.