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Maharashtra, Tamil Nadu oppose advance power payments

State-run electricity distribution companies (discoms) of Maharashtra and Tamil Nadu have opposed the central government panel’s recommendation to make advance payments to power producers. The recommendation was made by a committee which was constituted by the Union power ministry ‘to look into the issue of delayed payments by discoms’ to power generators.Delayed payment from discoms have been cited as one of the reasons behind the rising stress in the sector. This impairs the generating company’s ability to service debt and exhausts their working capital. Inability to service debt leads to lower credit ratings and higher interest rates.According to the committee’s report, most of the stressed independent power producers (IPPs) are paying i.....

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