The Centre is leaving no stone unturned in its efforts to induce payment discipline among state-run electricity distribution entities (discoms). Power and renewable energy minister RK Singh told FE that the government would move the Supreme Court soon against the Andhra Pradesh High Court’s October 16, 2019 interim, ex parte order, staying the Union power ministry’s August 1 fiat making it mandatory for discoms to abide by the letters of credit (LCs) mechanism contained in the power purchase agreements (PPAs) for purchase of electricity from gencos.
Though the court’s order was specific to the LCs with regard to those renewable units from which Andhra Pradesh buy power and was in view of the fact the LC condition was waived by these units in the relevant PPA, it ran contrary to the Centre’s intent.
