CERC move to cut late payment charges will help avoid liquidity issues, say experts

The Central Electricity Regulatory Commission’s (CERC) move to reduce late payment surcharge, in the wake of Covid-19 outbreak, will help discoms avoid liquidity issues.

A CERC order said that late payment surcharge (LPS) payable by discoms to gencos and transmission companies will be lowered to 1 per cent per month from 1.5 per cent during the lockdown period.

The move to not announce a moratorium has been welcomed, as this ensures payments to generation and transmission companies. “This will ensure smooth functioning of the entire power sector, and avoid liquidity issues at this important hour where grid security is of utmost importance,” said Pratik Agarwal, Managing Director, Sterlite Power.