The ministry of power has proposed to amend rules to help electricity producers sell power to a third party, which can reduce fixed costs and cut retail tariff for end consumers.

The ministry on Thursday circulated the draft Electricity (Late Payment Surcharge) Amendment Rules, 2021 seeking comments from stakeholders The rules were uploaded on the ministry’s website.

The ministry proposes to take one more step towards reducing the burden of the distribution licensee (discoms) to help reduce the retail tariff for electricity consumers, a statement said.

It added that the generating companies were being given an option to sell power to third parties and recover their costs.

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 the power to any consumer or any other licensee or power exchanges for the period of such a default, the statement said.

The claim will 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.”

The statement added that due to non-payment of outstanding dues, the distribution licensees are burdened with the increase in the late payment surcharge.