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Government announces relief measures for power sector to ensure uninterrupted supply of electricity

NEW DELHI: The government on Saturday announced a slew of relief measures, including three-month moratorium for distribution companies (Discoms) to pay to gencos , to ensure 24X7 electricity supply during the lockdown period.

From last August, the goverment had made it mandatory for discoms to issue Letter of Credit to get power supply from gencos.

Besides discoms were given option to get power supply on single day advanced payment. This was done in view of the mounting outstanding dues of discoms towards gencos.

For ensuring uninterrupted power supply, the power ministry has also announced that payment security will be reduced by 50 per cent.

According to a statement by the power ministry, directions are issued to power regulator CERC to provide three-month moratorium to discoms to make payment to gencos (generating companies) and transmission utilities.

Also, there will be no penalty on late payment. Besides, states are requested to issue similar directions to SERCs ( State Electricity Regulatory Commissions) .

Despite the lockdown imposed to contain the spread of COVID-19, the whole workforce of the power sector – generation, transmission, distribution and system operations – is working round the clock, Power Minister R K Singh said in the statement.

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 concerned.

Due to the lockdown, consumers are unable to pay their dues to distribution companies (discoms).

This has affected the liquidity position of discoms thereby impairing their ability to pay to the generating and transmission companies.

In this context,  Singh has approved significant relief measures for the power sector.

The decisions have been taken to ease the liquidity problems of discoms.

CPSU Generation / Transmission Companies will continue supply/ transmission of electricity even to discoms which have large outstanding dues to the generation / transmission companies.

Till June 30, the payment security mechanism to be maintained by discoms with gencos for dispatch of power shall be reduced by 50 per cent.