The Ministry of Power (MOP) has proposed regulating short-term and general network access (GNA) for distribution licensees (DISCOMs) who fail to clear their dues even after two and a half months.

The Ministry has proposed amendments to the Electricity (Late Payment Surcharge and Related Matters) Rules 2023, and encouraged Interested stakeholders to submit their comments by January 12, 2024.

The regulations will be referred to as the Electricity (Late Payment Surcharge and Related Matters) (Amendment) Rules, 2023. They are scheduled to become effective upon their publication in the official gazette.

The first amendment to the rules outlines the measures to be taken in cases of non-payment of dues by the distribution licensee or other users of the transmission system, even after two and a half months from the presentation of the bill by the generating company, transmission licensee, or trading licensee, or in the case of default in the payment of installments.

The short-term access or temporary general network access (T-GNA) or GNA for the sale and purchase of electricity through short-term contracts or power exchanges will be entirely regulated for the defaulting DISCOM.

The same restriction will apply to any existing short-term access, T-GNA or GNA.

The National Load Despatch Centre may, under exceptional circumstances for grid security, temporarily review the regulation of short-term access or T-GNA and GNA after recording the reasons in writing.

If, one month after this regulation of access, or if the dues remain unpaid for three and a half months, the medium-term open access or long-term access or T-GNA or GNA for the sale and purchase of electricity through contracts other than short-term contracts would be regulated by 10%.

The reduction or drawal of long-term access, medium-term open access, or T-GNA of GNA for the sale and purchase of electricity through contracts other than short-term contracts will occur progressively by 10% each month.

Only after the payment of outstanding dues will the regulation of short-term, medium-term open access, long-term access, or T-GNA or GNA under this rule end and be restored at the earliest, but not later than two days.

The National Load Despatch Centre is expected to issue a detailed procedure to implement these rules.

In case of the reduction of the drawl schedule, the liability for payment of capacity charges for its original share in the generating station and the inter-state transmission (ISTS) charges will remain with the regulated entity.

“Short-term access” in the above context is defined as access to the transmission system for up to one year. “Medium-term open access” pertains to access for periods ranging from one to three years, while “long-term open access” refers to access for periods exceeding three years.

Additionally, the term “short-term contract” means a contract for the sale or purchase of electricity for up to one year.

Power not requisitioned by a distribution licensee

The second proposed amendment will mandate the DISCOM to communicate its power requisition schedule for each day, pertaining to each generating company with which it has a purchase agreement, at least two hours before the closure of the timeframe for submitting proposals or bids in the day-ahead market for that day.

In the event of a failure to provide such intimation, the generating company can offer the un-requisitioned surplus power, inclusive of power available against the declared capacity of the unit under shutdown, in the power exchanges while adhering to the specified limitations on ramping and start-up capabilities as outlined in the grid code.

Provided that in cases where the power offered by the generating company remains uncleared in the Day-Ahead Market (DAM), it will subsequently be offered in other market segments, including the Real-Time Market (RTM), within the power exchanges.

Additionally, such power offerings in the market will be subjected to a price ceiling not exceeding 120% of its energy charge, as determined or adopted by the appropriate commission.

Suppose the generating company fails to present such un-requisitioned surplus power in the power exchanges. In that case, the un-requisitioned surplus power, up to the declared capacity and not offered in the power exchanges, will not be considered available for computing the payment of fixed charges.

In June last year, MoP notified the ‘Late Payment Surcharge and Related Matters Rules, 2022.’ According to the rules, a late payment surcharge will be payable on the outstanding amount after the due date at the base rate of the late payment surcharge applicable for the first month of default.

DISCOMs owed power generators ₹799.77 billion (~$9.6 billion) in total dues for the monthly billing cycle in October 2023. The current outstanding dues, excluding the latest monthly dues, are ₹232.62 billion (~$2.8 billion). The overdue before the trigger date is ₹232.46 billion (~$3.3 billion), after which the amount will increase by ₹160.1 million (~$1.9 million) as the late payment surcharge would become applicable.

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