Madhya Pradesh govt asks wind energy firms for discounts on dues

The government of Madhya Pradesh, alleged to be delaying payments to wind power producers for more than a year, is offering to get all these dues cleared, on a condition.

MP Power Management Company (MPPMCL) has asked the producers to “offer rebate of one per cent on outstanding dues to expedite the payment of dues”. 

As many as 266 power purchase agreements (PPAs), signed by around 50 companies operating in the state, are impacted by the delay in payment. The cumulative capacity of wind power in the state is 2,400 Mw. 

State government officials claim they have an agreement on around 150 PPAs for waiver on the monthly bill and late payment surcharge.  MPPMCL managing director S K 

Shukla said after the rebate was offered, delays in payment had reduced considerably. 

And, that they’d collected Rs 3 billion in the current financial year as rebate against timely payment to the wind power developers. 

In a communication to the developers, MPPMCL had said, “It is to intimate that most wind power generators are offering one per cent rebate on their dues, along with 

waiver of surcharge, provided payment of their dues are made expeditiously. In view of the above, please consider (the) offer."

The letter, dated January 5, went to all wind power companies and had been reviewed by Business Standard. MPPMCL is the holding company for the three power distribution companies in the state.

At the same time, some leading entities such as Adani Green Energy, Orange Renewable and Ostro Energy are fighting a legal battle at various regulatory commissions to avoid any such mediation, said officials. 

“We are making best efforts and have been successful in getting rebate from the companies for making timely payments to them in 15 days. The nature of dispute with 

some developers is of a purely commercial nature. We are honouring the PPAs and making payment as per the contract. 

There is financial constraint due to RPO (renewable power purchase obligation) fulfillment and power supply to village areas but payment delay has considerably reduced,” Shukla told Business Standard over telephone.

He said 80 per cent of the developers had received payment for their dues till July 2017 and the balance was under accounting procedures. 
 

However, sector executives said after the state electricity regulator directed expediting of payments, not more than a dozen entities had received the full amount of pending dues. 

Those which agreed to give a rebate had got the principal amount but not the surcharge amount arising out of the delay. 

ReNew Power, Hero Future Energies and CLP India are some leading names which agreed to the rebate but have received only a part of the pending principal amount. 

Sector executives say some developers are planning to file a contempt petition against MPPMCL for not following the direction of the regulatory commission on timely payment.