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Govt plans measures to aid power sector

March 29, 2020 05:33 AM


Govt plans measures to aid power sector
Anisha Dutta

New Delhi : With a dip of 30% in demand for electricity because of the closure of commercial activity due to the Coronavirus lockdown, the Centre has stepped in with relief measures to support the power sector, a top official familiar with the matter said.

These include a three-month moratorium on payment of money owed by financially squeezed electricity distribution companies (Discoms) to generating companies (Gencos) with no penalty on late payment. The ministry is also working to ensure adequate coal supply to thermal power generators to prevent power disruptions.

Union power minister RK Singh said the ministry is committed to ensuring 24x7 power supply during the lockdown. “Despite lockdown, whole workforce of power sector is working round-the-clock to keep all establishments lit,” Singh said.

The ministry has issued directions that, until May 30, the payment security mechanism maintained by the Discoms with the Gencos for dispatch of power will be reduced by 50%. The ministry has directed the Central Electricity Regulatory Commission to provide a moratorium of 3 months to Discoms to make payments to Gencos and transmission licensees, and not to levy late penalties. State are being requested to issue similar directions to state power commissions. Singh has also directed Gencos and transmission companies to continue transmission even to Discoms that have large outstanding dues, which were ₹82,414 crore until February.

“Even Gencos would need support as they were already struggling with low capacity utilisation and mounting debts from Discoms. Government may have to facilitate interest-free working capital loans for Gencos,” said Debashish Mishra, a partner at Deloitte India.

Around 70% of power generation in the country is by coal-based power plants. In order to maintain the continuity of supply of coal and transportation by Indian Railways, the ministry is in touch with the ministries of railways and coal. Union coal minister Pralhad Joshi said Saturday coal supplies had been declared an essential service. The ministry said all officials had been directed to ensure critical coal supplies are maintained.

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