MoP issues draft LPS rules

The MoP has issued draft Electricity (Late Payment Surcharge) Rules, 2020. The rules have been drafted in view of the current low rates of interest prevailing so that the rates of late payment surcharge (LPS) reflect the current cost of borrowing. According to the draft rules, the LPS will be payable on payments outstanding after the due date at the applicable bank rate or the rate as provided in the agreement for supply or transmission of power, if any, whichever is lower. The LPS rate will increase by 50 basis points each month after the expiry of the first month from the due date, subject to a maximum of the applicable bank rate plus 200 basis points.