State discoms end Force Majeure period, restart power purchases

New Delhi: With electricity demand picking up, state power distribution utilities are ending the force majeure period and have restarted power purchases they had earlier suspended.However, private power companies have started exploring legal options to contest non-payment of fixed charges by states for about 60 days of the force majeure event, sources said. Senior officials in private power firms said they have begun seeking legal opinions for sending notices to power distribution companies as power bills for supply in March have started getting due.In the absence of consensus among state distribution companies and power plants, power industry expects a fresh round of litigation.The power companies have said less demand due to Covid-19 pandemic does not qualify under the force majeure events listed in power purchase agreements with distribution companies.“States invocation of force majeure clause to avoid paying fixed cost is flawed as electricity generation, transmission and distribution has been declared essential activity,” Association of Power Producers director general Ashok Khurana said.

from Economic Times https://ift.tt/3gUsZlJ