CEA panel moots TReDS-type e-platform for discoms to pay IPPs

The panel formed under chairman of the Central Electricity Authority (CEA) to explore prepaid payments by state discoms to independent power producers (IPPS) has suggested setting up an e-platform for discounting of bills on the lines of the system being used by MSMEs. In February this year, the government had constituted a panel under the CEA to explore prepaid payments options by state electricity distribution companies, which are known for delayed payments, to power plants.

Following this, in June, the Union power ministry had mandated state-run discoms to offer letters of credit (LCs) against their power purchases as a payment security from August 1. Since then most discoms have started issuing LCs. The panel was headed by CEA chairman Prakash Mhaske had members from the Union power ministry, power producers and two state-run discoms.

Cash-starved state discoms, it can be noted that, owe over Rs 51,000 crore in arrears to private sector power producers, leading to the over Rs 3 lakh crore bad loans among 30 producers in the power sector, which are still awaiting resolution.