In a strategic move to bolster the efficiency of the power sector, the government has introduced key amendments to the Electricity (Late Payment Surcharge and Related Matters) Rules of 2022. These alterations mandate power generation companies to offer surplus electricity, falling within the declared generation capacity but unneeded by distribution companies, on power exchanges. Companies failing to adhere to this provision will be rendered ineligible to claim capacity or fixed charges for the surplus power.
Furthermore, the amendments restrict the sale of surplus power on power exchanges to not exceed 120% of the energy charge plus applicable transmission charge. This nuanced regulation aims to optimise the purchase and utilisation of surplus electricity, fostering a more dynamic and responsive power market. Aligned with statutory provisions governing access to the national power grid, the amended rules stipulate that outstanding dues must be settled promptly. Upon the payment of overdue amounts, the regulation of access will cease, and restoration to the national grid must be initiated within a day. This streamlined process facilitates distribution companies facing curtailment due to payment defaults to swiftly restore access, ensuring a seamless and uninterrupted supply of electricity to meet the escalating demand across the nation. Introduced in 2022 to address cash flow challenges primarily faced by generation and transmission companies, the Electricity (Late Payment Surcharge and Related Matters) Rules aimed to instil timely payments throughout the power sector. The government highlights substantial progress in recovering outstanding dues, with most distribution companies now adhering to regular payment schedules.
Remarkably, the total unpaid bills have witnessed a significant reduction, plummeting to approximately ₹48,000 crores in February 2024 from a staggering ₹1.4 lakh crores in June 2022. This notable improvement underscores the positive impact of the rule changes in achieving financial discipline within the power sector.
