Centre Mulls More Steps To Keep Cash-Strapped Discoms Afloat
Electricity pylon and electrical power lines against a white sky India. (Photographer: Karen Dias/Bloomberg)

Centre Mulls More Steps To Keep Cash-Strapped Discoms Afloat


The government may soon announce more steps like cheaper working capital and lower tariff for power discoms to ensure uninterrupted electricity supply during the lockdown to contain Covid-19.

“The Power Ministry is working on a proposal to provide relief to discom to keep them afloat during the lockdown, especially when the demand is low and their bills collections is negligible,” according to a source.

The power demand has came down by almost one-third during the lockdown. The demand was down by about 29 percent at 121.38 GW on April 10 compared to 170.52 GW on the same day last year.

The demand was down mainly due to lower requirements from industry and state power distribution companies.

The peak power demand is the actual highest energy supply during the day across the country.

According to the source, the discoms are facing a liquidity crunch and therefore the efforts of the central government would be to provide them working capital at lower interest rates.

Besides, the government may direct central and state power regulators to reduce tariffs for the discoms, the source added.

However, these measures may require Union Cabinet approval as it has financial implications.

The proposal could be sent for the Cabinet approval next week, the source said.

Last month, the power ministry had taken some measures to provide relief to discoms, which included delayed payment to gencos and lower late payment surcharge on bills generated till June 30.

Amid the low power demand during the lockdown, the spot power price touched a three-year low of 60 paise per unit for supplies on March 25 on the Indian Energy Exchange.

The average spot power price is hovering around Rs 2.50 per unit at electricity exchanges.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.