Power Ministry asked power companies to charge LPS at rate not exceeding 12 % per annum

Power Ministry of India has advised all power generating and transmission companies to charge Late Payment Surcharge (LPS) at a rate not exceeding 12 per cent per annum for all payments made under liquidity infusion scheme.

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Key-Points

The rate of LPS in many cases ranges upto 18 per cent per annum and has adversely impacted Discoms during lockdown phase due to COVID-19.

Discoms are given 60 days by power producers for payment of electricity supply bills. Post this period, the payment becomes overdue for which power generators charge penalty interest in most cases.

The liquidity scheme worth Rs 90,000 crore was announced in May by Finance Minister Nirmala Sitharaman under which the government was looking to infuse the amount in discoms.