Centre Amends Electricity, Late Payment Surcharge Rules 2022

GERC Imposes Additional Surcharge Of Re 1/Kwh For Open Access Consumers

The Central government has amended the Electricity (Late Payment Surcharge and Related Matters) Rules of 2022 to ensure an adequate supply of electricity and to meet the growing demand in the country. The government amended the rule to ensure the optimum utilisation of available power-generating capacity. These amendments are expected to enhance the reliability of power supply for all consumers. 

Speaking about the amendments, the Union Minister for Power and New & Renewable Energy RK Singh, stated, “A key amendment which has been made related to surplus power which is within the declared generation capacity but not requisitioned by distribution companies.” The Minister said, “Some power generators were not offering this surplus power in the market, thus resulting in unused power capacity at national level. To address this issue and optimize the use of available power, power generators who do not offer their surplus power will now not be eligible to claim capacity or fixed charges corresponding to that surplus quantum. Additionally, this surplus power cannot be offered for sale in the power exchange, at a price of more than 120 percent of the energy charge plus the applicable transmission charge. This will increase the likelihood of the surplus electricity getting purchased and utilised.”

Furthermore, amendments have been made to align the Rules with statutory provisions related to accessing the national power grid. These amendments facilitate distribution companies facing curtailment of access due to payment defaults, in getting quicker restoration of access to the national grid once they settle their outstanding dues.

The Power Minister stated, “The Electricity (Late Payment Surcharge and Related Matters) Rules were introduced in 2022 to tackle cash flow challenges faced mainly by generation companies and transmission companies and to promote timely payments across the power sector. Since their notification, there has been significant progress in recovering outstanding dues, with most distribution companies now adhering to regular payment schedules. The total unpaid bills have been reduced from around Rs. 1.4 lakh crores in June 2022 to around Rs. 48,000 crores in February 2024.”