Electricity bills in Delhi go up with 4% rise in PPA cost: Report

The cost of electricity in Delhi has increased with hike in power purchase adjustment cost (PPAC), imposed by discoms on consumers, by 4 per cent from mid June, official sources said on Sunday.

A power department official said the hike was made by the power distribution companies (discoms) after approval by the Delhi Electricity Regulatory Commission(DERC) due to increase in prices of fuel like coal and gas.

No immediate reaction of DERC was available.

The PPAC is a surcharge to compensate the discoms for variations in the market-driven fuel costs. It is applied as a surcharge on total energy cost and fixed charge component of an electricity bill, officials said.

"The PPAC in Delhi has been increased by 4 per cent from June 11, according to the approval of the DERC," said an official source.

According to the Ministry of Power directions on November 9, 2021, every state regulatory commission (DERC in the case of Delhi) has to place a mechanism for automatic pass through of fuel and power procurement cost in tariff for ensuring the viability of power sector, said a discom official.

More than 25 States/Union Territories have implemented fuel surcharge adjustment formula, he said.

The PPAC is a requirement under the Electricity Act, DERC's own tariff orders and Appellate Tribunal for Electricity (APTEL) orders. The central regulatory commission, CERC allows central PSU gencos like NTPC, NHPC and trancos, PPAC on a monthly basis. On the other hand, Delhi discoms are allowed PPAC on a quarterly basis, he said.

The PPAC is levied to off-set the increase in the fuel prices. In the latest instance, the decision to increase the PPAC is based on the blending of imported coal, increased gas prices and high prices in power exchanges, which had reached to almost Rs 20 per unit, before being capped by the CERC to Rs 12 per unit, officials said.

Since 2002, the cost of buying power for Delhi discoms has increased by around 300 per cent, a cost on which discoms have no control; whereas the retail tariff has risen by around 90 per cent in the corresponding period, claimed the discom official.

The discoms distribution licence levies PPAC of 4.5 per cent without going through the regulatory proceedings. In case the actual PPAC exceeds 4.5 per cent, the discoms file application to the DERC for the differential PPAC claim. After approval from the commission, the differential PPAC is charged in subsequent bills.

Ramvir Singh Bidhuri, BJP MLA and Leader of Opposition in Delhi Assembly, demanded the Kejriwal government to immediately withdraw the hike.

"The Kejriwal government is increasing electricity rates from the backdoor in the name of PPAC," he charged.

The Kejriwal government on the one hand has imposed conditions on the scheme of subsidy of electricity, and on the other hand has increased the rates of electricity in the name of Power Purchase Adjustment Cost, he said.

"Apart from this, the domestic and commercial rates in Delhi are the highest in the whole country. Delhi's domestic consumers have to pay around Rs 8 per unit and commercial consumers up to Rs 14," he claimed.