Government proposes amendment to Electricity (Late Payment Surcharge) Rules

What is the News?

The Ministry of Power has released the draft Electricity (Late Payment Surcharge) Amendment Rules, 2021.

Purpose of the Amendment:

• The Rules seek to amend the norms for facilitating electricity generators to sell power to third parties. This can help reduce fixed costs and cut retail tariffs for electricity consumers.

Key Provisions of the rules:

Late Fee Payment:

1. If a distribution licensee has any payment, including late payment surcharge, outstanding after the expiry of seven months from the due date as prescribed in the PPA (power purchase agreement).
2. Then the generating company may sell power to any consumer or any other licensee or power exchanges for the period of such default.

Payment Bill:

1. The payment shall be made by the distribution licensee first against the oldest procurement of power and then to the second-oldest procurement and so on. 
2. This will ensure that payment against a procurement is not made unless and until all procurement older than that has been paid for.

Time Tagged:

1. All the bills payable by a distribution licensee to a generating company or a trading licensee for power procured from it or to a transmission licensee shall be time-tagged with respect to the prescribed date of payment specified in the PPA.