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Power regulator rejects discoms' proposal to raise surcharge

Monday, 30 December 2013 - 5:45pm IST | Place: New Delhi | Agency: DNA
Setback to power companies comes as Arvind Kejriwal takes over as new chief minister after promising to bring down tariff

Whether Arvind Kejriwal manages to reduce Delhi’s power tariff by 50% remains to be seen, but the power regulator has taken note of the new CM’s poll promise and seems to be acting accordingly. 

The Delhi Electricity Regulatory Commission (DERC) on Monday scrapped power distribution companies’ proposal of an increase in a fuel surcharge hike. The discoms had proposed a hike in the Power Purchase Adjustment Cost (PPAC) of two to seven per cent, but the regulator has turned down their proposal.

Fuel surcharge is a floating component added to the electricity tariff. It is the additional charge that the discoms pay while purchasing power. The DERC reviews the surcharge every four quarters and then decides on the need to increase or decrease the surcharge. This surcharge had increased every quarter by an average three per cent because of an increase in the price of coal.

For the July-September 2013 quarter, Tata Power had made a submission to increase surcharge by two per cent while Reliance companies BRPL and BYPL had sought an increase of 3.5 per cent and 7 per cent respectively.

However, the DERC turned down the request of all the three discoms. “The regulator did not find any change in the power purchase cost in the quarter between July to September and so the proposal has been turned down,” said DERC chairman PD Sudhakar.

The discoms say the regulator’s decision will affect service delivery. “We are already reeling under heavy losses and with the DERC not increasing the fuel surcharge, it is going to be difficult for discoms to meet the city’s power demands at this cost,” said an official with discom on condition of anonymity.

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