New Electricity Rules Transform Power Supply in India

In a move to ensure adequate electricity supply to consumers and meet the growing demand, the Indian government has amended the Electricity Late Payment Surcharge and Related Matters Rules of 2022. These amendments aim to enhance the reliability of power supply for all consumers, according to a statement from the power ministry.

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Addressing Surplus Power

One of the key amendments pertains to surplus power, which refers to power within the declared generation capacity but remains unutilized due to lack of requisition by distribution companies. Previously, some power generators were not offering this surplus power in the market, resulting in unused power capacity at the national level.

To address this issue, the amended rules stipulate that power generators who fail to offer their surplus power will no longer 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 exceeding 120% of the energy charge plus applicable transmission charge.

Facilitating Access to National Power Grid

The amendments also aim to align the rules with statutory provisions related to accessing the national power grid. These changes facilitate distribution companies facing curtailment of access due to payment defaults in obtaining quicker restoration of access to the national grid once they settle their outstanding dues.

Progress in Recovering Outstanding Dues

The Electricity Late Payment Surcharge and Related Matters Rules were introduced in 2022 to address cash flow challenges faced by generation 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 approximately Rs 1.4 lakh crores in June 2022 to around Rs. 48,000 crores in February 2024.

Effective Date of Amendments

The amendments to the Electricity Late Payment Surcharge and Related Matters Rules were notified on February 29, 2024.