Discoms Now Get Three Month Moratorium On Payments To Power Producers


The government has decided to provide three months moratorium to the financially stressed state Discoms on their payment dues to power generating companies as it looks to prevent power shutdowns during Covid-19 induced nationwide lockdown.

As part of a series of relief measures finalised by the power ministry, discoms would also have to maintain just 50 per cent of the payment security (through letter of credit) mechanism with the granting companies.

Due to the lockdown, consumers are unable to pay their dues to the Distribution Companies (Discoms). This has affected the liquidity position of the Discoms thereby impairing their ability to pay to the generating and transmission companies.

Power minister R.K. Singh said in a statement that the government is committed to providing 24×7 supply of electricity to all consumers and the relief measures are aimed towards that goal.

It has been decided that central sector power generation and transmission companies such as NTPC, PowerGrid will continue supply/ transmission of electricity even to Discoms which have large outstanding dues. During the present emergency, there will be no curtailment of supply to any DISCOM, a government state that said.

Moreover, the letter of credit (LC) opened by banks for getting power supplies from generators will be reduced by 50 per cent till June 30 to prevent adding financial pressure on discoms. The discoms total outstanding dues had already crossed Rs 80,000 crore mark.

The power ministry has also directed the Central Electricity Regulatory Commission (CERC) to provide a moratorium of three months to Discoms to make payments to generating companies and transmission licensees and not to levy penal rates of late payment surcharge. State Governments are now being requested to issue similar directions to State Electricity Regulatory Commissions.

Around 70 per cent of power generation is from coal based power plants. In order to maintain the continuity of supply of coal by domestic coal companies and transportation by railways, the power ministry is in touch with the Ministries of Railways and Coal.

Unlike other sectors, the power sector is functioning with full workforce round the clock to ensure that all homes and establishments are lighted in this period of a medical emergency.

With the inputs of IANS