NTPC to give Rs 1,363 cr rebate on fixed charges to discoms

Power producer NTPC will give Rs 1,363 crore discount to distribution companies (discom) on fixed or capacity charges during the lockdown period this fiscal, the state-run company said on Wednesday. The NTPC board has also approved deferring the collection of Rs 2,064 crore fixed charges from discoms till the end of lockdown, imposed to contain the coronavirus pandemic. The charges would be collected in three equal installments without any interest, the PSU said.

The fixed charges are paid by discoms under power purchase agreement for the cost of setting up of a power plant.

The revenue collection of power distribution companies was hit due to reduced industrial activity after the lockdown was imposed to contain the spread of COVID-19 in the country.

The government last month announced a liquidity infusion of Rs 90,000 crore through REC and Power Finance Corp into crisis-hit discoms. The liquidity shot will be securitised against the receivables of discoms from consumers.

NTPC said that its board of directors in a meeting on June 9, 2020, "approved deferment of capacity charges of Rs 2,064 crore to DISCOMs, to be payable without interest after the end of the lockdown period in three equal monthly instalments".NTPC said that its board of directors in a meeting on June 9, 2020, "approved deferment of capacity charges of Rs 2,064 crore to DISCOMs, to be payable without interest after the end of the lockdown period in three equal monthly instalments".

The board also approved a rebate of Rs 1,363 crore on the capacity charges billed during the lockdown period to discoms on account of COVID-19, in financial year 2020-21, it stated.

The PSU on May 17 had announced that it would consider deferment of capacity charges and rebate to distribution companies and a rebate of 20-25 per cent on fixed charges to discoms following the direction of the power ministry.

Earlier last month talking about the recent relief given to discoms reeling under financial stress due to slump in demand amid the lockdown, Power Minister R K Singh had said that central public sector undertaking (CPSU) power generators had been asked to defer fixed charges from the discoms.

Watch Zee Business live TV below:

"After the economy opens up, those fixed charges would be paid by discoms in equal installments without interest. This would be huge relief.

"We have asked our CPSUs (gencos) to give 20 to 25 per cent discount to discoms on cost of power. We want discoms to pass it on to consumers. This will be reflected in the first bill of the consumers after economy reopens (after lockdown is over)," he had said.