PowerGrid to place 20-25% rebate proposal before board in next meeting

• Along with announcing a Rs 90,000 crore package, the government had asked PowerGrid to offer a rebate of 20-25% on inter-state transmission charges

• The proposal is part of a slew of measures announced to address the financial stress being faced by discoms

New Delhi: State-run PowerGrid said on Monday that it will place the proposal received from the government with respect to providing to 20-25 percent rebate to discoms (power distribution companies) on fixed charges levied by it before its Board of Directors at the next meeting. Along with announcing a Rs 90,000 crore package, the government had asked Central PSUs to defer fixed charges and offer a rebate of around 20-25 percent on power supply billed to discoms and inter-state transmission charges levied by PowerGrid in order to relieve the debt burden on distribution companies. 

PowerGrid board to consider 20-25% rebate issue at next meeting

In a regulatory filing to the stock exchanges, PowerGrid said, "This is to inform that POWERGRID has received a letter dated 15.05.2020 and Corrigendum dated 16.05.2020 from Ministry of Power to consider to offer to the Distribution Companies (DISCOMs) rebate of about 20-25% on inter-state transmission charges levied by PGCIL for passing on to the end consumers for the lockdown period on account of Covid-19 pandemic. The matter will be placed in the next meeting of the Board of Directors and the decision thereon shall be informed. 

Rs 90,000-cr package expected to ease the burden on discoms: RK Singh

"The package for the power sector will significantly reduce the burden on discoms for maintaining the distribution of electricity as supplied by gencos/transcos during these difficult times," Power Minister RK Singh had said on May 16 after the formal announcement by Finance Minister Nirmala Sitharaman. The government had on May 13 decided to make an infusion of liquidity of Rs 90,000 crore through PFC (Power Finance Corporation) and REC (Rural Electrification Corporation) as a part of the Atmanirbhar Bharat Abhiyan.

The government had said that the COVID-19 pandemic and the resultant lockdown had adversely affected the power sector finances, creating a situation of acute liquidity crisis across the value chain in the power sector as a consequence. In this situation, the liquidity infusion in the power sector value chain will help to tide over the cash flow problem. This money will help discoms to repay most of the money that they owe to power generators (Gencos) and Transmission Companies (Transcos). It will help restart the virtuous cycle of cash flow in the power sector, the government had said.