The Ministry of Power (MoP) has issued the Electricity Late Payment Surcharge (LPS) Rules, 2021. The new rules will be applicable to power purchase agreements and transmission service agreements in which the tariffs have been determined through competitive bidding. As per these rules, LPS will be payable on an outstanding payment after the due date at the base rate for the first month of default. The LPS rate for the successive months will increase by 0.5 per cent for every month of delay. The surcharge should not be higher than 3 per cent of the base rate at any time. Further, a discom that still has an LPS outstanding against a bill seven months from the due date will be debarred from procuring power from the power exchange or via short-term open access until the bill is paid.