Rules for facilitating electricity producers to sell power to a third party

The Ministry of Power has proposed to amend rules for facilitating electricity producers to sell power to a third party, which it said can pare fixed costs and cut retail tariff for end consumers.

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The ministry circulated the draft Electricity (Late Payment Surcharge) Amendment Rules, 2021, seeking comments for the same.

The power generating companies are being given an option to sell power to third parties and recover costs. To this extent, the fixed cost burden of the distribution licensee shall be reduced, the ministry stated.

If a distribution licensee has any payment, including late payment surcharge, outstanding after the expiry of seven months from the due date as prescribed in the PPA (power purchase agreement), the generating company may sell power to any consumer or any other licensee or power exchanges, for the period of such default.

The claim would be retained on payment of fixed charges or capacity charges from the distribution licensee, after giving a notice of at least 15 days to the distribution licensee.

The claim, if any, shall be reconciled on an annual basis and shall be limited to only under-recovery of the fixed charges or capacity charges.