Power ministry asks plants to charge late fee at less than 12 per cent per annum

The power ministry has advised all power generating companies and transmission companies to charge late payment surcharge (LPS) from distribution utilities at a rate not exceeding 12 per cent per annum for all payments made under the liquidity infusion scheme under Atmanirbhar Bharat scheme.

The move is aimed at easing the financial burden on power distribution utilities. According to the press release by Ministry of Power, the applicable rate of LPS, in general, is quite high despite the fact that interest rates in the country have softened over the last few years. The rate of LPS in many cases ranges upto 18 per cent per annum and has adversely impacted discoms during this difficult phase of lockdown imposed on account of Covid-19 pandemic.