Last-minute rush of discoms to meet August 1 deadline for bank guarantees
NEW DELHI: Some state distribution companies are making a last-minute dash to banks for funding ahead of the Centre’s August 1 deadline, after which they will not get electricity supply unless they provide bank guarantees for payment, but authorities in several states say they are confused about how to go about it.
To tame defaulting distribution companies (discoms), the Centre had ordered on June 28 that in case discoms do not open or maintain the line of credit in favour of a power plant, the regional load despatch centres will not despatch power to the state. Generating companies will still be paid fixed costs — a key component of the tariff, apart from variable generation costs — but discoms will not even be able to buy from shortterm markets.
