HomeEnergy NewsCOIVD-19: Power ministry relaxes payment security mechanism for discoms to ensure 24/7 supply

COIVD-19: Power ministry relaxes payment security mechanism for discoms to ensure 24/7 supply

The ministry of power has approved a slew of measures amidst the COVID-19 lockdown across India to ensure the government's commitment to 24/7 electricity supply.

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By Anshu Sharma  March 28, 2020, 2:44:18 PM IST (Published)

COIVD-19: Power ministry relaxes payment security mechanism for discoms to ensure 24/7 supply
The ministry of power has approved a slew of measures amidst the COVID-19 lockdown across India to ensure the government's commitment to 24/7 electricity supply.


It has allowed public sector companies involved in the generation and transmission of electricity to continue supply to electricity distribution companies (discom) that have large dues to ensure there is no curtailment of electricity supply in any state.

With lockdown in place, electricity consumers may not be able to pay bills in time, which may create liquidity issues for discoms. The ministry has decided to reduce payment security to 50 percent for the generation companies by discoms until June 30, 2020. In August 2019, the ministry of power directed distribution companies to adhere to strict payment security mechanisms.

To reduce the burden on discoms in view of the current crisis, the government has given three month's moratorium on payments to generation and transmission companies.

"Directions have been issued to the Central Electricity Regulatory Commission 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 being requested to issue similar directions to State Electricity Regulatory Commissions," said the press statement.

India has installed a power generation capacity of over 3.7 lakh MW of which 70 percent is generated by the coal-based power plants. The coal ministry said, "Coal stocks at power plants stand at 41.8 MT equivalent to 24 days consumption as of 26th March 2020. The minister informed that various steps have been taken to ensure the easy and adequate availability of coal to every coal-dependent industry/power sector."

In order to maintain the continuity of supply of coal by domestic coal companies and transportation by railways, the ministry is in touch with the ministries of railways and coal.

At the end of January, 2020 discoms have Rs 88,311 crore as outstanding to power generating companies. Outstanding at the end of January for PSU electricity generation companies stand at Rs 29,714 crore, for state-run companies Rs 20,095 crore, independent power producers at Rs 19,764 crore and Rs 6,618 crore for the renewable energy companies.
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