Draft Electricity (Late Payment Surcharge and related matters) Rules, 2021; open for suggestions till Jan 10, 2022

The Ministry of Power has issued Draft Electricity (Late Payment Surcharge and related matters) Rules, 2021. The rules provide rates of late payment surcharge, payment security mechanism, penalty, process for adjustment and liquidation of arrears.  Electricity (Late Payment Surcharge) Rules, 2021 will be repealed by these new rules.

Key highlights:

  • Late Payment Surcharge shall be payable on the payment outstanding after the due date at the base rate for the period of first month default. The rate shall increase by 0.5 percent for every month of delay provided that the Late Payment Surcharge shall not be more than three percent higher than the base rate at any time.
  • A distribution licensee shall maintain unconditional, irrevocable and adequate Payment security mechanisms. In case of non-maintenance of PSM, Generating Companies, Electricity Trading Licensees and Transmission Licensees shall regulate the power supply. If the Generating Company supplies power without PSM or Advance Payment, the right to collect the LSP will no longer exist.
  • Also, the obligation of the generating company to supply power shall reduce to 75% and balance 25% of contracted power may be sold by the generating through the Power Exchange.
  • During the period of default, Distribution Licensee shall continue to be liable for the payment of fixed charges or capacity charges as applicable under the agreement.
  • In case a distribution licensee does not requisition power from a must-run power plant, the compensation shall be payable by the licensee to the generating company. Bills payable by a distribution licensee to a generating company or a transmission company or a trading company for power procured from it shall be made by the distribution licensee first against the oldest bill and then to the second oldest bill.


*Tanvi Singh, Editorial Assistant has reported this brief.

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