No power supply to discoms without bank guarantees
NEW DELHI: Power companies will mandatorily have to snap supplies to state electricity distribution companies that fail to open or maintain bank guarantees with effect from August 1, the Centre said in on order on Wednesday.
Financially weaker distribution companies can open letters of credit for even one day, one week or a fortnight of electricity supply and keep renewing them, said the order issued by the power ministry.
It seeks to curb addition to the outstanding bills of Rs 41,747 crore by discoms. Non-payment of dues by discoms is one of the key reasons for stress in the power sector.
