Covid-19: CERC pares late payment surcharge by 0.5% on power discoms

Power ministry last week asked CERC to provide relief to discoms as they are unable to collect payments from consumers because of the 21-day lockdown

2 min read Last Updated : Apr 04 2020 | 12:20 AM IST

Central Electricity Regulatory Commission (CERC) reduced the late payment surcharge levied on power distribution companies (discoms) for delayed payment to power generators and transmission companies.

The regulator passed am order on Friday lowering the surcharge to 1 per cent per month from 1.5 per cent per month for 45 days till June 30. “The generating companies whose tariff has been determined under Section 63 of the Act by this Commission, relief on the Late Payment Surcharge for payment which become delayed beyond 45 days (from the date of presentation of the bill) during the period from 24.03.2020 to 30.06.2020 may be claimed in terms of the force majeure provisions of the respective power purchase agreements (PPAs),” said the order.

It gave similar relief for the payment to be made to the transmission companies.

The Ministry of Power last week asked the CERC to provide relief to discoms as they are unable to collect payments from consumers because of the 21-day Covid-19 lockdown. At the same time, the high-paying industrial and commercial units are not operating.

The ministry had also asked CERC to provide a three-month moratorium to discoms for paying to gencos and transcos. The Regulator did not issue any order in that matter. With the power ministry issuing statement that discoms can defer payment, several states issued notice of non-payment to gencos. The states have invoked ‘Force Majeure’ and told gencos that any payment delay would not be considered as breach of contract.

CERC however has provided relief only on late payment surcharge.

The ministry also directed all central power gencos and transcos to continue supply/transmission of electricity even to the discoms which have large outstanding dues to them. "During the present emergency there will be no curtailment of supply to any discom," the ministry said in a public statement last week.