Electricity distribution companies (Escoms) in Karnataka have to pay over Rs 1,600 crore to Adani Udupi Power Corporation Limited (UPCL) in late payment charges following an order by the Central Electricity Regulatory Commission (CERC).

Senior government officials said the CERC order pertains to late payment surcharges (LPS) between 2010 and 2015 when the escoms and the company, then owned by Nagarjuna Power Corporation Limited, were involved in a dispute over tariff.

Last year, the company moved CERC saying the escoms have continued to delay payments, which has led to the accumulation of LPS with interest.

The CERC also noted that the escoms have not formally disputed late payment charges.

“At no point of time until June 5, 2018 did the Power Company of Karnataka Limited (PCKL) or the Karnataka escoms object to or dispute their liability to pay late payment surcharges for delayed payment of tariff as communicated by the petitioner company,” the CERC held, directing UPCL to send the updated bill to escoms in 15 days and setting a deadline of 60 days for the companies to clear the bill.

An official from PCKL, a company under the KPTCL that facilitates power purchase from private firms to escoms, said that financial indiscipline among escoms as well as lack of legal expertise to avoid errors have led to the problem.

“First, there is delay on the part of the government in releasing money for subsidised power given to farmers and others. Second, the companies themselves are not disciplined and are investing revenue obtained from consumers in new works as if it is their capital,” the official said.

Officials said a major part of the Rs 1,600 crore has to come from escoms in Hubballi, Mysuru and Kalaburagi. “The Bengaluru and Mangaluru escoms are relatively better in making payments. Kalaburagi escom has to shell out about Rs 900 crore,” the official said.

Karnataka Power Transmission Corporation Limited Managing Director Dr Manjula N said there was a provision to appeal against the order. “We at PCKL only act as facilitators. So the initiative has to be taken by escoms. A decision on appealing against the order will be taken by the state government,” she said.