Discoms get 3 months for payment to gencos to ensure 24X7 power supply
30/03/2020
NEW DELHI: To assure uninterrupted power supply in the middle of the countrywide lockdown to contain the coronavirus outbreak, the Union Power Ministry has relaxed payment norms for electricity distribution companies (discoms).
The central government has asked the state-run power generating companies such as NTPC and Power Grid Corporation of India Ltd (PGCIL) to not curtail supply to the states even if the discoms do not clear payments to them on time.
The lockdown is seen to take a toll on the finances of the state-run discoms, which are finding it difficult to continue meter reading exercises and collect payments from consumers.
To make matters worse for discoms, their revenues are seen to decrease on account of lower usage by high paying consumers such as the railways, industrial and commercial users.
Though the household sector consumes more than a third of electricity supplies, it is cross-subsidised by industrial and commercial users of electricity. Tariffs on domestic consumers are on an average 40 per cent lower than that for industrial users of power. The Power Ministry has also directed the Central Electricity Regulatory Commission to provide a moratorium of three months to discoms to make payments to power plants, and not to levy late payment surcharges. State governments have been requested to issue similar directions to state power regulators.
Additionally, the quantum of advance payment that discoms need to furnish as security has been reduced to half till June 30. The Ministry had implemented the letter of credit (LC) mechanism since August 2019, which made it mandatory for discoms to issue advance LCs worth the total value of power to be supplied.
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