Power ministry’s directive on payment security mechanism could lead to load shedding, cautions ICRA

Kolkata: The centre’s direction of putting in place a security mechanism before wheeling power to utilities would be a positive for power generation companies and is expected to improve payment pattern of utilities. However, it may be difficult for utilities to secure large quantum of letter of credits given their poor financials in many states and hence its implementation may be an issue, following this supply curtailment may follow leading to load shedding, said ICRANSE -0.19 % in a recent note.

The ministry of power has recently issued directions to the National Load Dispatch Centre (NLDC) and Regional Load Dispatch Centres (RLDC) to schedule and dispatch power from generation companies to distribution utilities (discoms) only after