Electricity gets costlier in Delhi: Bills witness increase as PPA costs rise by 4%

According to government sources on Sunday, power purchase adjustment costs (PPAC), which discoms impose on consumers, have increased in Delhi by 4% as of mid-June. According to an official of the electricity department, the rise was implemented by the power distribution companies (discoms) with Delhi Electricity Regulatory Commission (DERC) clearance due to an increase in the cost of fuel such as coal and gas. There was no quick response from DERC available. The PPAC is a levy designed to make up for changes in market-driven fuel costs and compensate the discoms.

According to officials, it is added as a surcharge to the fixed charge and total energy cost portions of an electricity bill. According to a discom official, every state regulatory commission (DERC in the case of Delhi) must implement a mechanism for the automatic move of fuel and power procurement costs in tariff in accordance with directions from the Ministry of Power on November 9, 2021. This will ensure the effectiveness of the power sector.

Price increases ranging from 2 to 6 percent in various Delhi neighbourhoods 4 percent in the BSES Rajdhani area and 6 percent in the BSES Yamuna area. Rates of electricity have increased by 2% in Tata Power Delhi Distribution Ltd. regions (TPDDL). The new electricity rate will be in effect starting on June 10 and lasting through August 31. In the past, production has been impacted by an increase in input costs. Due to a lack of coal and its rising price, a decision was made to boost.

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According to him, the fuel cost adjustment formula has been applied in more than 25 States and Union Territories. The Electricity Act, DERC's own tariff orders, and the Appellate Tribunal for Electricity (APTEL) direct all calls for the PPAC. Central PSU gencos like NTPC NSE 1.08 percent, NHPC NSE 0.31 percent, and trancos PPAC are permitted monthly by the central regulatory agency, CERC. Delhi discoms, on the other hand, are permitted PPAC once every three months, he said.

To balance the rise in fuel prices, the PPAC is imposed. In the most recent case, the CERC's ceiling of Rs 12 per unit on power exchange prices followed the mixing of imported coal, higher gas prices, and high prices that had reached roughly Rs 20 per unit, according to officials. According to the discom official, while the retail rate has climbed by about 90% over the same period, the cost of buying electricity for Delhi discoms has soared by almost 300% since 2002, a cost over which discoms have no influence. PPAC of 4.5% is assessed by the discoms distribution licence without passing through the proper channels.

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The discoms submit an application to the DERC for the differential PPAC claim if the actual PPAC exceeds 4.5 percent. The commission's approval is required before the difference in PPAC can be billed in subsequent bills. According to Ramvir Singh Bidhuri, a BJP MLA, the Kejriwal government has hiked electricity tariffs under the guise of Power Purchase Adjustment Cost while also placing limitations on the scheme for electricity subsidies.