All-India Power Engineers Federation on Tuesday criticised the decision of Union Ministry of Power to introduce letter of credit (LC) system, a payment security mechanism to ensure timely payment of dues by Power Distribution Companies (Discoms) in lieu of supply by producers without similar protection to power utilities engaged in retail distribution.
AIPEF president Shailendra Dubey said in Lucknow that the system, scheduled to come into force from August 1, would cause an upheaval in power sector, particularly in uninterrupted supply to consumers.
“Most Discoms across the country were not in a position to give required LC in advance due to their poor financial position, even after them joining Ujjwal Discom Assurance Yojana (UDAY),” he said.
