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The government departments across Karnataka owe the State electricity supply companies a whopping ₹10,342.13 crore in unpaid power bills, with Bangalore Electricity Supply Company Limited (Bescom) alone accounting for nearly half the dues at ₹5,221.16 crore.
As of July 31, the Rural Development and Panchayat Raj (RDPR) Department, Urban Development Department (UDD) and the Major Irrigation Department, together contribute roughly 93% of the total arrears.
Largest defaulter
RDPR, specifically, is the single largest defaulter, accounting for ₹5,588.33 crore, or about 54% of the total dues. The UDD follows with ₹2,434.91 crore and the Major Irrigation Department owes ₹1,570.06 crore.
Apart from Bescom, which serves Bengaluru and nearby areas and carries the largest share of unpaid bills, other Escoms have smaller exposures – Hubli Electricity Supply Company Limited (Hescom) at ₹1,833.53 crore, Gulbarga Electricity Supply Company Limited (Gescom) at ₹1,710.81 crore, Chamundeshwari Electricity Supply Company Limited (CESC) owe ₹937.70 crore, Mangalore Electricity Supply Company Limited (Mescom) at ₹614.75 crore, and Hukkeri dues at ₹24.18 crore.
How it accumulated
A closer look at department-level balances explains how the arrears have accumulated.
For RDPR, the unpaid balance at the start of April this year was ₹4,795.63 crore. Between April and July, the department received new electricity bills of ₹966.84 crore but made payments of only ₹174.15 crore, leaving a closing balance of ₹5,588.32 crore. The UDD owed ₹2,271.51 crore at the beginning of April. After new bills of ₹962.04 crore were raised and ₹798.65 crore was collected, the closing arrears stood at ₹2,434.91 crore. The Major Irrigation Department also added to the liabilities, from an opening balance of ₹1,352.72 crore, new bills of ₹281.11 crore were generated, payments of ₹63.78 crore were made, leaving ₹1,570.04 crore unpaid.
Other departments have smaller outstanding dues. Commerce and Industry owe ₹339.60 crore, Minor Irrigation ₹143.74 crore, Roads, Buildings and Slum Development ₹102.59 crore, and other government departments together owe ₹162.90 crore.
From the Escom perspective, Bescom’s exposure (the amount of money the Escom is at risk of not receiving) is dominated by RDPR and UDD, which together make up more than 90% of its total dues. Hescom is largely owed by Major Irrigation and RDPR, Gescom’s dues are mostly from RDPR, while CESC and Mescom have smaller but significant concentrations in RDPR and Commerce and Industry.
Paying in advance
The growing arrears also bring up a key rule meant to prevent exactly this situation, M.G. Prabhakar, former advisory member, KERC said, explaining that according to the Karnataka Electricity Regulatory Commission (Manner of Payment of Subsidy by State government) Regulations, 2008, power companies must supply electricity at subsidised rates to certain groups like farmers, rural households or government-run schemes, only if the State government pays the subsidy in advance.
“The rule clearly says that the subsidy money should be released for each quarter of the financial year. However, these payments are often delayed. When subsidies or bill payments from government departments don’t come on time, the electricity companies are left short of funds. This adds to their financial strain, even though the regulation was meant to ensure a steady flow of money,” Mr. Prabhakar added.
Power generating firms
According to the latest data from the Union government’s PRAAPTI portal, Karnataka’s electricity supply companies as of October 4, owe ₹4,239.08 crore to power generating firms, of which ₹2,122.04 crore is overdue. Experts believe that delays in payments from government departments have created a ripple effect leaving Escoms short of cash to settle their own dues on time.
Bescom officials, however, were not available for comments.
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