Power costs up 31% amid West Asia crisis: Sood

New Delhi: Delhi power minister Ashish Sood said Saturday the latest fuel and power purchase adjustment surcharge (PPAC) hike was necessitated by a sharp rise in global fuel prices amid the West Asia crisis, which pushed the city’s power procurement costs up by 31% in the past month.TOI had reported that electricity bills will rise for many consumers after the Delhi Electricity Regulatory Commission (DERC) approved a higher PPAC.Bills are expected to increase by about 5.7% for BSES Yamuna Power Ltd (BYPL) consumers in east and central Delhi and 3.4% for BSES Rajdhani Power Ltd (BRPL) consumers in south and west Delhi, while Tata Power Delhi Distribution Ltd (TPDDL) consumers are unlikely to see any noticeable change.“Power Purchase Adjustment Cost (PPAC) is not a new arrangement. The electricity laws of the country already permit power companies to adjust for the rising cost of fuel used to generate electricity. Due to the situation in West Asia and other prevailing circumstances, fuel costs have risen sharply, leading to a 31% increase in power procurement costs during the past month,” Sood said.The minister added that despite the surge in generation costs, govt intervention helped shield consumers from most of the impact.

“Even though power procurement costs rose by 31%, the DERC has allowed only an average increase of 2.4% in PPAC. Earlier, the PPAC had been capped at 14.5% till March 31. With the latest revision, it stands at approximately 17.5–17.9%,” Sood said.Sood further said that since the last tariff order was issued by DERC on Sept 30, 2021, the PPAC currently charged by discoms reflects the gap between the power purchase price on that date and prevailing rates in 2026.

“This means the PPAC being recovered at present captures the increase in power procurement costs over the past nearly five years,” he said.He said the move aimed to balance rising procurement costs while limiting the burden on consumers, adding that subsidy beneficiaries would remain insulated.“All consumers receiving Delhi govt electricity subsidies (based on the number of units consumed) will face absolutely no impact on their electricity bills due to this regulatory adjustment,” Sood said.Chamber of Trade and Industries chairperson Brijesh Goyal termed the hike a “summer shock” and urged chief minister Rekha Gupta to provide relief to traders, warning that higher tariffs would raise business costs.He said commercial and industrial power rates in Delhi could become 15–20% higher than in neighbouring Haryana and Uttar Pradesh, adding to financial pressure on traders and potentially pushing up prices of goods.Reacting to the PPAC hike, AAP termed it “another inflation blow” by BJP govt, while Congress alleged that power distribution companies had been allowed to pass on the burden to consumers at a time when electricity demand peaks during Delhi’s summer.AAP said that their govt had provided relief through free electricity, but BJP was now increasing power costs and burdening common households.Delhi Congress president Devender Yadav said the hike would further strain residents already hit by rising prices of petrol, diesel, LPG and CNG.Meanwhile, Delhi BJP spokesperson Praveen Shankar Kapoor said the govt had ensured the minimum possible increase. He added that over 42 lakh of Delhi’s 63 lakh domestic consumers who receive free electricity would see no impact, while the effect on others would be minimal.