Government announces relief package for power sector amid lockdown due to coronavirus COVID-19

The union government on Friday (March 28,2020) has approved a financial relief package for the power sector. The relief was announced because the government admitted that electricity consumers will not be able to pay the electricity bill for the next three months which will lead shortage of money to the power supply.

Government announces relief package for power sector amid lockdown due to coronavirus COVID-19

New Delhi: The union government on Friday (March 28,2020) has approved a financial relief package for the power sector. The relief was announced because the government admitted that electricity consumers will not be able to pay the electricity bill for the next three months which will lead shortage of money to the power supply companies.

The govt statement read, ''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." 

The Ministry of Energy and Power Supply further said that CPSU Generation and Transmission Companies will continue supply and transmission of electricity even to DISCOMs which have large outstanding dues to the Generation/Transmission companies. Adding that there will be no curtailment of power supply during the present emergency.

The Central government has also requested the state governments to issue similar directions to State Electricity Regulatory Commissions to ensure that no one faces shortage of power supply during lockdown. 

The payment security mechanism will be maintained by the Distribution Companies till June 30, 2020 said the govt. ''Till 30 June 2020 the payment security mechanism to be maintained by the Distribution Companies with the Generating Companies for dispatch of power shall be reduced by fifty percent," said the statement.

In 2019, the government had made it mandatory for state distribution companies (discoms) to offer letters of credit (LC) as part of the payment security mechanisms in power purchase agreements (PPAs) to ensure timely payments of dues.

India is under lockdown for 21-days as called by PM Narendra Modi in the wake of coronavirus pandemic due to which the country has come down to standstill.