Ministry Issues Notification on Late Payment Surcharge and Related Matters Rules, 2022

Central Government Sanctions Around Rs. 700 Cr for Power Infra and Smart Metering Projects

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The Ministry of Power (MoP) has notified the ‘Late Payment Surcharge and Related Matters Rules, 2022.


These rules shall be applicable to outstanding dues of generating companies inter-state transmission licensees and electricity trading licensees.

Late Payment Surcharge shall be payable on the payment outstanding after the due date at the base rate of Late Payment Surcharge applicable for the period for the first month of default. The rate of Late Payment Surcharge for the successive months of default shall increase by 0.5 percent for every month of delay provided that the Late Payment Surcharge shall not be more than 3 percent higher than the base rate at anytime. Provided that the rate, at which Late Payment Surcharge shall be payable, shall not be higher than the rate of Late Payment Surcharge specified in the agreement, if any.

Late payment surcharge refers to the charges payable by a distribution company (DISCOM) to a generating company or electricity trader for power procured or by a user of a transmission system to a transmission licensee on account of a delay in payment of monthly charges beyond the due date.

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The total outstanding dues including Late Payment Surcharge upto the date of the notification of these rules shall be rescheduled and the due dates redetermined for payment by a distribution licensee in the following maximum number of equated monthly installments:-

For Outstanding dues of upto 500 Cr the Maximum no. of equated monthly installments is 12 months. For 501 upto 1000 Cr is 20 month, For 1,001 – 2,000 Cr is 28 months, For 2,001 – 4,000 Cr is 34 months, For 4,001 – 10,000 Cr is 40 months and for >10,000 Cr is 48 months.

The first due date for payment of the equated monthly installment shall be the fifth day of the immediate month that comes after forty five days from notification of these rules and due date for all subsequent equated monthly installments shall be due on fifth day of date the subsequent months.

In case of delay in EMI payment, the late payment surcharge will be payable on the entire outstanding dues as on the date of notification of these rules.

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Non-payment of dues will result in the obligation of the generator company to supply power at 75% of contracted power to the distribution licencee. The remaining 25% of contracted power may be sold by the generating company through power exchanges.

Distribution licensees will continue to be responsible for paying fixed charges towards un-requisitioned powers.

The distribution licensee must not requisition the power from a must run power project. In this case, compensation will be paid by the licensee at the rate stated in the agreement.

View Ministry Notification here:

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