Govt amends electricity rules to address power surplus and enhance grid reliability

Power generators that do not offer their surplus power will no longer be eligible to claim capacity or fixed charges. The government has amended the Electricity (Late Payment Surcharge and Related Matters) Rules of 2022 to ensure an adequate supply of electricity amidst a surge in demand. The Union Minister for Power and New & Renewable Energy R. K. Singh has said that some power generators were not offering the surplus power in the market, thus resulting in unused power capacity at the national level. 

Power companies must now offer this extra power for sale on power exchange at not more than 120% of energy charge plus transmission charge. These changes will help make sure all the electricity is used



efficiently.

The minister said that these amendments will also streamline access to the national power grid for distribution companies. Earlier the Electricity (Late Payment Surcharge and Related Matters) Rules were introduced in 2022 to tackle cash flow challenges faced mainly by generation companies and transmission companies. They were essentially brought in to promote timely payments across the power sector. Since then, 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 around Rs. 1.4 lakh crores in June 2022 to around Rs. 48,000 crores in February 2024.