NTPC to forego Rs 1,363 crore as part of rebate to discoms on fixed charges

• The 20-25 percent rebate was proposed by the government in order to ease the debt burden on discoms whose revenue collection was hit due to the lockdown

• The rebate was part of a slew of measures announced to address the debt burden facing discoms in the country

New Delhi: Maharatna power PSU NTPC Limited will forego Rs 1,363 crore as part of the 20-25 percent rebate on fixed charges billed to discoms during the lockdown period in the current financial year, the state-run company said. The NTPC board has also given a nod to deferring the collection of Rs 2,064 crore fixed charges from discoms till the end of the lockdown put in place to control the spread of Coronavirus. As the government said, the charges will be collected in three equal installments without any interest, NTPC said.

According to Power Purchase Agreements, discoms pay a fixed charge to gencos for all the contracted quantity of electricity, even if power is not drawn. The 20-25 percent rebate was proposed by the government in order to ease the debt burden on discoms whose revenue collection was hit due to reduced industrial activity during the period of the lockdown.

NTPC board gives nod to rebate on and deferment of capacity charges

NTPC said that in a meeting on June 9, its board of directors "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 installments." The board also approved a rebate of Rs 1,363 crore on the capacity charges billed during the period of the lockdown to discoms, an official statement said.

On May 17, NTPC had said that it would consider deferment of capacity charges and a rebate of 20-25 percent to discoms on fixed charges, after the proposal was forwarded by the government.

The backdrop

While placing emphasis on reviving the debt-ridden power discoms in the country, the government has decided to infuse Rs 90,000 crore, as one-time relief package, into ailing discoms through state-run PFC (Power Finance Corporation) and REC (Rural Electrification Corporation) in May. In addition, the government had also advised PSUs to offer a rebate of 20-25 percent on power supplied (fixed cost), including Inter-State Transmission Charges (ISTS) payable to PGCIL (PowerGrid Corporation of India Ltd), for the lockdown period. The discoms have been asked to pass on these cost savings to the end consumers which will lead to a reduction in electricity cost, the Ministry of Power had said.