DISCOMs to continue paying renewable energy producers during Covid lockdown: MNRE

Twesh Mishra New Delhi | Updated on April 02, 2020 Published on April 02, 2020

DISCOMs can afford to pay as procurement from renewable energy sources is a small fraction of the total power sourced, says Ministry

Power distribution companies (DISCOMs) will have to clear dues of renewable energy producers on a regular basis during the Covid-19 lockdown. This decision was taken by the Ministry of New and Renewable Energy and conveyed to the State/Union territory governments, NTPC and SECI on April 1.

MNRE said that renewable energy generating stations have been granted must run status and this remains unchanged during the lockdown period. The DISCOMs are now supposed to continue clearing bills and procuring power from renewable energy players during the lockdown.

On March 28, the Ministry of Power relaxed the payment security mechanism to be ensured by DISCOMs. This was done to give support to DISCOMs that are finding it difficult to collect payments for bills raised on consumers in light of the 21-day lockdown.

DISCOMs were curtailing power procurement from renewable energy players as well. MNRE noted that DISCOMs have been given ample relaxations in the March 28 order. MNRE also said that procurement from renewable energy sources is a small fraction of the total power sourced and that DISCOMs can easily afford to make payments regularly for renewable energy.

“Many consumers of the DISCOMs are unable to pay their dues. This has critically affected the liquidity position of the DISCOMs thereby impairing their ability to make timely payments to generating and transmission companies and maintaining letter of credit,” the order from the Ministry of Power had said.

“Considering the unprecedented and force majeure situation, it has been decided that power may be scheduled even if payment security mechanism is established for 50 per cent of the amount for which payment security mechanism is to be otherwise established contractually. This order shall be in effect till June 30, 2020,” the Power Ministry added.

Normally, DISCOMs maintain a payment assurance for all the power that they intend to procure from a power generator. This is done to prevent build-up of dues as DISCOMs were notorious for delaying payments to power generating companies. The prepayment for power procurement mechanism was in place since June 28, 2019.

Published on April 02, 2020

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