Nodal agency: Ministry of Power

Policy brief

Ministry of Power has issued rules regarding clearance of pending bills and payment of late payment surcharge by DISCOMs to power generators and transmission companies.

Key highlights

Default trigger date 30 days after due date or 75 days after presentation of bill, wherever is later; or
Expiry of payment security mechanism
Base rate for late payment surcharge LPS shall be paid at base rate equivalent to SBI 1-year MCLR + 500 basis points.
Base rate shall increase by 50 basis points for every month of delay in payment, subject to maximum of base rate + 300 basis points.
Payment of existing overdues DISCOMs can pay outstanding overdues through EMIs as per following schedule:
< INR 5 billion: 12 months
INR 5-10 billion: 20 months
INR 10-20 billion: 28 months
INR 20-40 billion: 34 months
INR 40-100 billion: 40 months
> INR 100 billion: 48 months
Limiting supply to DISCOMs After default trigger date, generators may stop supplying power to DISCOMs and sell it at power exchange to recover overdues. 
Power supply through inter-state PPAs would be reduced in case of non-payment of overdues after default trigger date.
Nodal agency PFC; to submit weekly monitoring reports on overdues to MOP