Government Asks PGCIL to Offer 20-25% Rebate to DISCOMs on ISTS Charges

The proposed rebate has been requested on account of the COVID-19 outbreak


The Power Grid Corporation of India Limited (PGCIL), a state-owned power transmission company, recently received a letter from the Ministry of Power to consider offering a rebate of about 20-25% to distribution companies (DISCOMs) on the inter-state transmission charges levied by it. The rebates will be provided for passing on the benefit to the end consumer.

According to its Bombay Stock Exchange (BSE) filing, the ministry has asked PGCIL to consider the rebate for the lockdown period on account of the coronavirus (COVID-19) pandemic. The matter will be placed in the next board meeting before making a decision, states the company’s BSE filing.

The government has been trying to help the DISCOMs stay financially afloat in these tough times. For instance, the center has proposed to privatize DISCOMs in the union territories. Although the state distribution companies are under the respective state governments, however, the DISCOMs in the UTs are administered by the central government.

Recently, Finance Minister Nirmala Sitaraman announced that the power distribution companies would receive ₹900 billion (~$12.03 billion) as part of a stimulus package to help the Indian economy recover from the coronavirus crisis.

Central public sector power generation companies have also been ordered to give rebates to DISCOMs, which will, in turn, be passed on to the final consumers (industrial).

At the end of March 2020, DISCOMs owed 68.37 billion (~$914.5 million) to renewable energy generators, according to the data from the Ministry of Power’s payment ratification and analysis portal (PRAAPTI).

Earlier, the Ministry of Power had issued a clarification where it stated that the DISCOMs could deposit letters of credits for 50% of the cost of power they want to be scheduled. The remaining 50% will have to be paid within 45 days of the presentation of the bill or as specified in the power purchase agreement.

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