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The Cabinet Committee on Economic Affairs said late payment surcharge will be made mandatory for power distribution companies. This is in line with the recommendations of a Group of Ministers (GoM) on issues relating to stressed thermal power projects.
“We will be writing to the regulators to enforce this on the Discoms,” Minister of State (Independent Charge) for Power and New and Renewable Energy, RK Singh, said.
The move aims to put a check on errant Discoms that seek waiver of late payment surcharge levied by power generation companies. “Effectively this waiver would result in a discount of 3-5 per cent on the total bills raised,” a power sector official said.
“Through this decision, the CCEA has also allowed the grant of coal linkages for short-term power purchase agreements. The existing coal linkage will be allowed to be used in case of termination of power purchase agreements due to payment default by power distribution companies,” Singh said.
“With this approval, only two items are left on the agenda for the Empowered Group of Ministers. These pertain to the payment security mechanism and the natural gas supply assurance and support for gas-based power plants,” Singh added.
Singh said, “The payment security mechanism for power generators requires a nod from the Reserve Bank of India. Some more ground needs to be covered with the Ministry of Petroleum and Natural Gas with regard to the support proposals for natural gas-based power plants.”
Hydro prower
In another decision, measures to promote the hydro power sector got the Union Cabinet’s nod.
All hydro power projects will now be declared as renewable energy projects. The Cabinet has increased the debt repayment period of hydropower projects to 18 years. There will also be a Budgetary support for funding flood moderation component of hydropower projects.
“This will help us gain access to priority sector lending...New projects will be able to avail these benefits,” a top NHPC official told BusinessLine .
The CCEA also approved the investment approval for 2x660MW Khurja Super Thermal Power Plant (STPP) in Bulandshahar, Uttar Pradesh.
The project is estimated to cost ₹11,089.42 crore and will be commissioned by 2023-2024. The development of Amelia Coal Mine in Singraulli, Madhya Pradesh will supply coal for this project.
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