Power plants may get to stop supply to defaulters

The government proposes to enable electricity generating plants to stop power supply to distribution utilities that default on bill payment for more than seven months and sell the produce elsewhere. The fixed cost burden of the distribution licensees shall be reduced to that extent, an official statement said.

Industry experts said the provision, being included in draft Electricity Late Payment Surcharge, 2021, will benefit power generators that do not have third party sale clause in their power purchase agreements (PPAs) with state distribution utilities. The rules propose to supersede existing PPA arrangements.