…as Govt proposes flexibility to Gencos on 3rd party sale of electricity meant for discoms in default
Perhaps as part of efforts to reduce the debt distribution companies are owing generation companies and other concerns in the electricity value chain in the country, the authorities in the power sector could as well adopt the current model the Indian Government is proposing to ensure the burdened distribution companies are saved from some of the debts they are owing others along the value chain.
“In yet another reform initiative aimed at streamlining the payment mechanism in the power sector, the power ministry proposes to extend freedom to generating companies to sell power to a third party to the extent of default by discoms and recover their cost.”
The Ministry of Power last week circulated draft Electricity (Late Payment Surcharge) amendment Rules, 2021 seeking comments from the stakeholders on its proposals that also aim to reduce the burden of the distribution licensee and help in bringing down the retail tariff for the electricity consumers.
As per the draft rules, if a distribution licensee has any payment including late payment surcharge outstanding after the expiry of seven months from the due date of payment as prescribed in the (power purchase agreement) PPA; then notwithstanding anything contained in the PPA or the Power Supply Agreement, the generating company may sell power to any consumer or any other licensee or power exchanges, for the period of such default.