Centre’s fixed cost discount could lower gencos return by this much

If Central government’s thermal power plants offers a 25% discount on fixed cost of the power supplied during the lockdown period, their effective post-tax return on equity (RoE) in FY21 could drop to 12.6% from their regulated RoE of 15.5%, according to analysts at India Ratings.

In the wake of the coronavirus outbreak, the Union power ministry has advised CPSU utilities, including NTPC, to consider offering a one-time rebate of 20-25% on fixed charges to the state-owned power distribution companies (discoms).