Discoms may be asked to pay 50% advance payments to power companies

The ministry of power on June 28 had issued an order mandating opening and maintaining of letter of credit as a payment security mechanism

To ease stress in the power generation sector, a Central Electricity Authority (CEA) panel has recommended that state distribution companies make advance payments to producers. Besides, the high-level committee, under CEA Chairman Prakash Mhaske, has suggested that power generation companies take legal action over non-payment by distribution companies.

Even as such dues amount to as much as Rs 22,313 crore (as on July 22, 2019), “perhaps none of them (power producers) has taken legal recourse to force discoms to comply with the provisions of PPA (power purchase agreement),” the committee has said in its report to the Ministry of Power. “Generating