NTPC offers a relief of Rs 13.6 billion to distribution companies during the pandemic

NTPC Limited has announced a discount of Rs 13.6 billion towards distribution companies on capacity charges owed by them during the lockdown period in the financial year 2020-21. The capacity charge is one of the fixed charges that are to be paid by the distribution companies. Under the power purchase agreement, these fixed charges are usually paid by the distribution company for the cost of setting up power plants. NTPC has further decided to defer charges equivalent of Rs 20.6 billion. According to a BSE filing, these charges are to be paid by distribution companies later without interest in three equal monthly instalments.

Due to low power demand from industrial consumers during lockdown, discoms have been struggling to recover charges to make payments to the generators. In May 2020, NTPC had announced that it would consider deferment of capacity charges and rebate to distribution companies and a rebate of 20-25 percent on fixed charges to discoms following the direction from the power ministry.In its advisory, the government had asked NTPC to consider the deferring capacity charges for power that has not been scheduled.

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