Your electricity bills may rise from next month, here’s why

Starting next month, consumers may see inflated electricity bills and/or frequency of power cuts increase, as part of a chain reaction set off by the government that ordered stopping supply to state electricity distribution companies (discoms) that don’t pay their bills on time.

On 28 June, the Ministry of Power directed all discoms to open and maintain sufficient letters of credit (LCs) as payment security under power purchase agreements (PPAs) with generation companies. The rule comes into effect in August. The government took this measure as discoms’ dues to generators have mounted, placing the latter and their lenders under stress.