OneIndia24News: Discoms can now settle dues through EMIs

The government on Friday allowed electricity distribution companies to settle their dues to power generating companies and transmission companies in equated monthly instalments (EMIs).

As per the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 notified on Friday, total dues including late payment surcharge up to the date of the notification of these rules shall be rescheduled and the due dates redetermined for payment by a distribution licensee in equated monthly instalments.

Late payment surcharges are payable by a discom to a genco on account of delay in payment of monthly charges beyond the due date.

While discoms with over ₹10,000 crore of dues can clear them in 48 EMIs, the ones in the range of ₹4,001-10,000 crore can pay them in 40 months. Discoms with dues of ₹2,001-4,000 crore and ₹1,001-2,000 crore will have 34 and 28 months, respectively. Entities that owe up to ₹500 crore, will have 12 monthly instalments to settle dues while those with dues in the range of ₹501-1,000 crore get 20 EMIs.


The rules are applicable to discoms’ outstanding dues to gencos, 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 applicable for the period for the first month of default,” the notification stated. The rate of late payment surcharge will increase by 0.5% for every successive month of delay, provided that the surcharge not exceed an amount 3% higher than base rate any time, the notification specified.

Ashok Sreenivas, coordinator at Prayas (Energy Group), an energy policy research organisation, said, “Through this, the government is trying to find a solution to make sure there is some cash flow going to generators even if they are not getting their dues at one go. At the same time, it is also an attempt to give discoms some breathing room to clear dues, while instilling some kind of a payment discipline.”

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