The Power Ministry has clarified that power distribution utilities can procure electricity from State government-owned power generation utilities without offering a Letter of Credit as an immediate payment assurance, in an official statement.
Of the country’s 358 GW installed power generation capacity, 105 GW are controlled by State governments. The rest is shared by Central government power generators (such as NTPC) and private power companies.
This may be seen as a relief to financially burdened power distribution companies (Discoms) who can now continue having easy settlement options for some power purchases they make.
