Power surcharge spike to make electricity costly in Delhi

New Delhi: Power bills will increase for lakhs of consumers in the city as Delhi Electricity Regulatory Commission (DERC) has allowed power distribution companies to recover higher power procurement costs through an increased fuel and power purchase adjustment surcharge (FPPAS), commonly known as PPAC.In percentage terms, consumers in areas served by BSES Yamuna Power Limited (BYPL) — east and central Delhi — are expected to rise by roughly 5.7%. In areas served by BSES Rajdhani Power Limited (BRPL), which are in south and west Delhi, the increase would be of 3.4%. Areas under Tata Power Delhi Distribution Limited (TPDDL) are unlikely to see any detectable change as the PPAC change is marginal.The hike will be implemented in June, and consumers will have to pay more from July onwards.BRPL’s PPAC has increased from 14.5% to 17.9%, while BYPL’s has risen from 11.7% to 17.4%. TPDDL’s PPAC has changed from 15.9% to 16%.The PPAC surcharge helps distribution companies recover from fluctuations in power purchase prices and fuel costs. As electricity generation depends largely on coal and natural gas, any increase in these costs raises the cost of power production and procurement. In Delhi, power purchase accounts for nearly 80% of a discom’s total expenditure, making the PPAC an important component of the electricity bill.

An official said that until March, PPAC was revised on a quarterly basis. From April onwards, the surcharge is being revised every month based on the actual power purchase costs.The latest increase follows a sharp rise in procurement costs in April, when demand increased because of rising temperatures and discoms had to procure expensive power from the market to meet the demand.DERC said that it has approved the new PPAC, subject to the submission of supporting documents and certification of its power purchase costs.The impact on consumers will vary depending on their electricity consumption and their distributor company. An official said according to the revised rates, a household consuming 400 units of electricity a month will pay about Rs 92 more in BYPL areas and Rs 56 more in BRPL areas. For households consuming 600 units a month, the amount would rise by Rs 170 in BYPL areas and Rs 102 in BRPL areas.The official clarified that the increase will not affect Delhi govt’s power subsidy because the subsidy is linked to the number of units consumed, rather than the final bill amount. In Delhi, consumption of electricity upto 200 units a month by a domestic consumer is not charged.