With its reduction being construed as a moratorium on payments, the Union Vitality Ministry has clarified that electrical energy distribution firms will proceed to be obligated to pay for vitality inner 45 days of presentation of the invoice. It, alternatively, diminished gradual price costs for the length between March 24 and June 30.
In a letter addressed to heads of vitality/vitality departments of all states, the Union Vitality Ministry on Monday acknowledged there became as soon as some “misconception” in terms of its closing month issue that had relaxed norms for a price security mechanism.
“It is made clear the duty to pay for the vitality inner 45 days of the presentation of the invoice (or the length given in the vitality dangle agreement) stays the same,” it acknowledged.
As per the rest granted closing month, the distribution firms will must both deposit or give Letter of Credit (LoC) for 50 per cent of the price of vitality they desire to take dangle of.
The splendid can absorb to be paid inner the length given in the PPA, failing which the delayed price surcharge will apply, it acknowledged.
Since August closing one year, vitality distribution firms, or discoms, are required to position up a price security mechanism like a letter of credit from a monetary institution, for shopping electrical energy from a generator.
In case of a default, this LoC is encashed. On March 28, the Union Authorities accepted a monetary reduction equipment for the vitality sector that equipped for easing of price security mechanism for 3 months and reduced price security quantity by half for future vitality purchases.
This became as soon as performed to assist discoms fighting non-price in nationwide lockdown. Within the letter on Monday, the ministry acknowledged gradual price surcharge is appropriate in case of nonpayment of dues inner the stipulated length. This surcharge in most circumstances goes up to 18 per cent per one year.
“Keeping in thoughts the hot space, the Authorities of India absorb vide letter dated March 28, 2020 urged the Central Electrical energy Regulatory Commission (CERC) to slash back the charges of gradual price surcharge appropriate for the length March 24, 2020, to June 30, 2020,” it acknowledged.
From July 1, the delayed price surcharge shall apply on the fee given in the vitality dangle agreement (PPA).
“The duty to pay for vitality inner 45 days of the presentation of the invoice or as equipped in the PPA stays unchanged,” it acknowledged.
“Obligation to pay for ability costs as per the PPA shall proceed, as does the duty to pay for transmission costs.”
The letter went on to command that efforts are additionally being made to infuse some liquidity in the vitality sector, the particulars of which could perhaps well be shared with Discoms quickly. “However, Discoms can also merely additionally raise funds, if required, to meet this disaster,” it added.