Discoms' regulatory assets cumulatively rose to Rs 88,720 crore by June 30, showed government data, indicating that financial woes of utilities run deeper than their outstanding dues from states, reported The Times of India on Wednesday.
While the data says the amount recognised by state regulators is Rs 88,720 crore, industry players believe it is just the tip of the iceberg and the actual amount could be in excess of Rs 1 trillion with claims tied up in legal knots at the appellate level or in higher courts, reported TOI.
Delhi's tariff regulator has recognised regulatory assets of Rs 8,954 crore for the three discoms operating in the capital, however, if the orders of appellate bodies and courts are added, the amount will be substantially higher, executives, quoted by TOI, said.
Also Read | Power shocks: Discoms need transparency
Regulatory assets are discom expenses that are recoverable in power tariff hikes.
Last year, a NITI Aayog-Rocky Mountain Institute India report said "regulatory assets create cash-flow problems for discoms, forcing them to borrow funds to cover the revenue deficit. The additional borrowing, coupled with the interest, adds to the burden of discoms".
Consumers also pay the price as regulators often levy a surcharge to cover their failure to allow tariffs to reflect costs.
Prime Minister Narendra Modi in July said outstanding dues that stretch over several months threaten the financial stability of discoms and gencos. According to the data from the power ministry, the states and the union territories (UTs) together owe Rs 1.3 trillion to discoms.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
First Published: Wed, September 14 2022. 10:14 IST