Discoms Face Debt Crisis Due to BRS' Poor Work, Shows White Paper on Power
Hyderabad: The accumulated losses of Telangana’s power distribution companies (discoms), TSSPDCL and TSNPDCL, increased to Rs 62,461 crore from 2014 to 2023 under the BRS regime, according to the White Paper on energy sector tabled by the Congress government in the Legislative Assembly on Thursday.
The debt burden of discoms increased to Rs 81,516 crore during the same period.
“Financial health of the power sector is precarious and is a matter of grave concern… Out of Rs 81,516 crore total debt, an amount of Rs 30,406 crore has been borrowed as working capital primarily to pay power charges to the generators. Despite this, an amount of Rs 28,673 crore of generation and transmission dues remain to be paid by discoms,” the White Paper read.
“The difficulty faced by discoms in paying power purchase bills has been aggravated by the default of state government in paying the power bills of its own departments, which have now mounted to Rs 28,842 crore. Of this, the amount due from lift irrigation projects alone is Rs 14,193 crore. The state government's default in paying committed true up charges of Rs 14,928 crore has further contributed to the further deterioration of discom finances,” it said.
Discoms incurred a loss of Rs 11,103 crore in 2022-23, with borrowings for working capital at Rs 29,114 crore in 2022-23.
As per the Power Finance Corporation (PFC) reports, the ranking of TS discoms was downgraded from B+ in 2015-16 to C- in 2021-22. As per these reports, the net worth of two discoms in 2021-22 was negative Rs 30,876 crore.
“The accumulated losses incurred by TS discoms have increased from Rs 12,186 crore at the time of formation of state on June 2, 2014, to Rs 62,461 crore by March 31, 2023,” it read.
The estimate adopted by TSERC for agricultural power is lesser than the estimate submitted by discoms. Therefore, a lesser subsidy for agriculture is being provisioned as per the tariff order. The difference is resulting in a financial burden on discoms. As of March 31, 2023, the additional cumulative financial burden on discoms due to the difference in the estimate of agricultural power was Rs 18,725 crore, according to the White Paper.
“In these circumstances, merely to keep the power supply going, discoms are resorting to borrowings on a regular basis which have reached unsustainable proportions. There is very limited scope to continue to fund the purchase of power through these means. Discoms are now finding themselves in debt trap due to failure of government in paying its dues and commitments to the sector,” it read.
According to the paper, at the time of the formation of Telangana state in 2014, the installed capacity of TS Genco was 4,365.26 MW. Prior to the formation of the state, power generation projects were conceived/initiated with a capacity of 2,960 MW. The commissioning of these projects after the formation of the state has been critical in providing a reliable power supply.
“In addition, special provisions in the AP Reorganisation Act, 2014, regarding power sector enabled the state to get over 1,800 MW power beyond the installed capacity in the state at that time. After formation of the state, only one power project of 1,080 MW capacity was conceived and commissioned at Bhadradri Thermal Power Stations (BTPS) with inordinate time and cost overrun using sub critical technology,” it read.
“Another power project of 4,000 MW, the Yadadri Thermal Power Station (YTPS) in Nalgonda district, was taken up at a location far away from the coal mines, leading to excess transport costs of over Rs 800 crore per year, which are liable to further escalate with time and will be applicable over entire lifetime of the project,” it read.
Agriculture connections increased from 19.03 lakh in 2014-15 to 27.99 lakh in 2023-24, the White Paper stated.
Accumulated losses
June 2, 2014: Rs 12,186 crore
March 31, 2023: Rs 62,461 crore
Total debt
Rs 81,516 crore: Rs 30,406 cr borrowed as working capital, dues of Rs 28,673 cr remain
2022-23 scenario
Loss: Rs 11,103 crore
Borrowings for working capital: Rs 29,114 crore
Major dues
Rs 28,842 crore is total due of govt departments
Rs 14,193 crore is due from lift irrigation projects
Rs 14,928 crore true-up charges
