New Delhi, August 24: In view of the stress in the sector in the COVID-19 pandemic, the power ministry has instructed power generation firms and transmission companies to levy the late payment surcharge on discoms at no more than 12%.
In certain cases, the rate of late payment surcharge (LPS) is up to 18 per cent per annum and during lockdown has adversely affected discoms.
The measure aims to ease the financial burden on discoms (power distribution utilities) and, a ministry statement said, would also benefit consumers.
“In order to alleviate the financial stress in the power system , all generating companies and transmission companies have been advised by Ministry of Power to charge Late Payment Surcharge at a rate not exceeding 12 per cent per annum (simple interest) for all payments made under the Liquidity Infusion Scheme of PFC and REC under Aatmanirbhar Bharat,” it said.
In general, the applicable rate of LPS is quite high despite the fact that interest rates in the country have softened over the last few years.
The pandemic has adversely affected the status of liquidity of all power sector stakeholders , in particular the discoms.
The government has taken a range of steps to reduce the adverse impact including capacity fee waiver, Letter of Credit relaxation provisions for power scheduling, Liquidity Infusion Scheme, etc.
One of the steps taken is in relation to LPS, which will be applicable for overdue payments by discoms to generating companies and transmission licensees for power purchase / transmission of electricity for the duration up to June 30th, 2020, it said.
This will help consumers, it added, by keeping smooth power supply and lowering charges despite the difficult times.
