(Updated in 2025) As Amended by G.S.R. 288(E)., dt. 05/05/2025 - Amendment in Rule 1(3) G.S.R. 146(E)., dt. 29/02/2024 - Amendments in Rule 7(1) and Rule 9(1)(6) [3rd June, 2022] In exercise of powers conferred by sub-section (1) of Section 176 of the Electricity Act, 2003 (Act 36 of 2003), and in supersession of the Electricity (Late Payment Surcharge) Rules, 2021, except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely: --

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S.1 Short title, Commencement and Applicability.--

(1) These rules may be called the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 .

(2) They shall come into force on the date of their publication in the Official Gazette.

(3) These rules shall be applicable to outstanding dues of ¹[generating companies, transmission licensees] and electricity trading licensees.

S.2 Definitions.--

(1) In these rules, unless the context otherwise requires, --

(a) "Act" means the Electricity Act, 2003 (Act 36 of 2003);

(b) "agreement" means and includes the following, namely: --

(i) Power Purchase Agreement between the distribution licensee and the generating company or electricity trading licensee; or

(ii) Power Supply Agreement between the distribution licensee and the electricity trading licensee; or (iii) Transmission Service Agreement between the transmission licensee and distribution licensee or other user of transmission system;

(iv) such other agreements by whatever name called and binding on the generating company, electricity trading licensee, transmission licensee, distribution licensee, and other user of transmission system, for supply of power and transmission services.

(c) "base rate of Late Payment Surcharge" means the marginal cost of funds based on lending rate for one year of the State Bank of India, as applicable on t

S.3 Late Payment Surcharge.--

(1) 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.

(2) The rate of Late Payment Surcharge for the successive months of default shall increase by 0.5 per. cent for every month of delay provided that the Late Payment Surcharge shall not be more than three per. cent 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.

S.4 Adjustment towards Late Payment Surcharge.--

All payments by a distribution licensee to a generating company or a trading licensee for power procured from it or by a user of a transmission system to a transmission licensee shall be first adjusted towards Late Payment Surcharge and thereafter, towards monthly charges, starting from the longest overdue bill.

S.5 Liquidation of arrears.--

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

Outstanding dues amount (in Rs. Crore)	Maximum no. of equated monthly installments (months)
Up to 500	12
501 - 1,000	20
1,001 - 2,000	28
2,001 - 4,000	34
4,001 - 10,000

S.6 Operationalising the payment security mechanism and its consequences.--

(1) A distribution licensee or other user of transmission system, as the case may be, shall maintain unconditional, irrevocable and adequate payment security mechanism.

(2) In case of non-maintenance of payment security mechanism generating companies, electricity trading licensees and transmission licensees shall regulate power supply to the distribution licensee in accordance with these rules.

(3) The supply of power shall only be made if an adequate payment security mechanism is maintained or in the absence thereof, advance payment is made:

Provided that in case the generating company supplies power without the payment security mechanism or without advance payment, it shall lose the right to collect the late payment surcharge from the distribution licensee:

Provided further that in case of non-payment of outstanding dues by the default trigger date, the obligation of the generating company to supply power shall be reduced to Seventy five per cent of the

S.7 Regulation of access to defaulting entities.--

In case of non-payment of dues, by the distribution licensee or other user of transmission system, even after two and half months from presentation of bill by the generating company or transmission licensee or trading licensee, or in case of default in the payment of instalments fixed under Rule 5, the power supply to the defaulting entity shall be regulated as follows: --

¹[(a) access, including any previously approved access, for the sale and purchase of electricity through short-term contracts or power exchange, shall be regulated entirely:

Provided that the National Load Despatch Centre may, in exceptional circumstances for grid security, temporarily review the regulation of access under these rules, after recording the reasons, in writing;

(b) one month after the commencement of regulation of access or if the dues remain unpaid for three and a half months, access for sale and purchase of electricity through contracts other than the short-term con

S.8 Supply obligation of the generating company.--

(1) In case a generating company fails to offer the contracted power as per the agreement to a distribution licensee and sells the contracted power without its consent to any other party, the said generating company, on a complaint to this effect by the licensee to the load dispatch centre concerned, shall be debarred from participating in Power Exchanges and on the Discovery of Efficient Electricity Pricing portal and scheduling of any new short-term contracts from that generating station for a period of three months from the date on which the default has been taken cognizance by the concerned load dispatch centre.

(2) The period of debarment shall increase to six months for second default and shall be one year for each successive default. Such debarment of the generating company shall be without prejudice to the rights of the distribution licensee for seeking compensation for the default by the generating company:

Provided that this rule shall not be applicable on th

S.9 Power not requisitioned by a distribution licensee.--

¹[(1) A distribution licensee shall intimate its schedule for requisitioning power for each day from each generating company with which it has an agreement for purchase of power at least two hours before the end of the time for placing proposals or bids in the day ahead market for that day, failing which the generating company, shall offer, the un- requisitioned surplus power including the power available against the declared capacity of the unit under shut down, in the power exchange, subject to the limitation of ramping and start up capability as specified by the Appropriate Commission:

Provided that if the power so offered by the generating company is not cleared in Day-Ahead Market, it shall be offered in other market segments, including the Real Time Market, in the power exchange:

Provided further that such offer of power, in the market shall be at a price not exceeding 120 per cent of its energy charge, as determined or adopted by the Appropriate Commi

S.10 Order of payment and adjustment towards Late Payment Surcharge.--

All the bills payable by a distribution licensee to a generating company or a transmission company or a trading company for power procured from it, shall be time tagged with respect to the date and time of submission of the bill and the payment made by the distribution licensee shall be adjusted first against the oldest bill and then to the second oldest bill and so on so as to ensure that payment against a bill is not adjusted unless and until all bills older than it have been paid for:

Provided that any adjustment towards late payment surcharge shall be done in the manner as specified in Rule 4.

S.11 Indemnifying Load Dispatch Centers.--

The concerned National Load Despatch Centre or Regional Load Despatch Centre or State Load Despatch Centre shall stand indemnified against any consequences or liability, including the cost of litigation that arise on account of action taken under these rules.

S.Electricity (Late Payment Surcharge and Related Matters) (Amendment) Rules, 2024 All Amendments Incorporated at Appropriate place

MINISTRY OF POWER

NOTIFICATION

New Delhi, the 28th February, 2024

G.S.R. 146(E).--In exercise of the powers conferred by sub-section (1) of section 176 of the Electricity Act, 2003 (36 of 2003), the Central Government hereby makes the following rules to amend the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, namely:-- 1. (1) These rules may be called the Electricity (Late Payment Surcharge and Related Matters) (Amendment) Rules, 2024. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 (hereinafter referred to as th S.Electricity (Late Payment Surcharge and Related Matters) (Amendment) Rules, 2025 All Amendments Incorporated at Appropriate place MINISTRY OF POWER NOTIFICATION New Delhi, the 2nd May, 2025 G.S.R. 288(E) .-- In exercise of the powers conferred by sub-section (1) of section 176 of the Electricity Act, 2003 (36 of 2003), the Central Government hereby makes the following rules further to amend the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, namely: 1. (1) These rules may be called the Electricity (Late Payment Surcharge and Related Matters) (Amendment) Rules, 2025. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, in rule 1, in sub-rule (3), for the