PSEG says not paid by electricity board in India

NEW YORK - U.S. power company Public Service Enterprise Group Inc. recently said an electricity board in India had failed to pay a power plant it partly owns and its investment may have to be written off if talks on the payments fail.

The company, which supplies electricity to New Jersey, owns a 20 percent stake in PPN Power Generating Company Ltd. in the southern Indian state of Tamil Nadu. All of PPN's output is sold under a long-term contract for 30 years to the state electricity board, which in turn sells it to customers.

In its annual report filed with regulators recently, PSEG said the state board had not fully paid PPN under the contract starting last April.

The past due receivable at PPN at the end of last year was about $95 million, of which the company's PSEG Global LLC unit's share is about $8 million, net a $10 million reserve.

It said the state electricity board had agreed to pay about $30 million of the $95 million owed and talks are underway regarding the remaining $65 million.

But PSEG warned in the annual report that failure of the talks could result in an impairment of its investment, which could have a "material", or significant, impact on both PSEG's and its Global unit's results.

Reuters