Bad news for Delhiites, electricity bills to see spike of 7-10% during May, June

Delhiites are set to embrace a steep hike in electricity bills in the months of May and June. Electricity bills may spike to at least 7-10 per cent in the May-June period due to revision of PPAC charged by the discoms, officials said on Sunday. The power purchase adjustment cost (PPAC) refers to a rise in fuel (coal, gas) costs incurred by the generation companies which is recovered by discoms from the consumers.  

It is calculated as percentage of fixed charge and energy charge (units consumed) components of the electricity bill. The Delhi Electricity Regulatory Commission (DERC) in its separate orders earlier this month allowed the three discoms to recover the PPAC of third quarter of 2024-25 in the May-June 2024 period. 

The PPAC allowed are 7.25 per cent for BRPL, 8.11 per cent for BYPL and 10.47 percent for TPDDL. The United Residents of Delhi (URD), an umbrella body of residents welfare associations in the city, slammed the move as "arbitrary". "The process under which PPAC charges have been imposed on the people of Delhi by DERC is legally wrong," said a statement from URD general secretary Saurabh Gandhi. 

"For the last several years, the Commission has been benefiting the power companies from other items. Now we had great hope from the Commission that has been formed that it will complete the work of tariff determination by following the prescribed procedure, but this Commission conducted a virtual public hearing where not enough time was given to the stakeholders to state their case," Gandhi claimed.  

It is also a fact that the PPAC claimed by various discoms and the PPAC awarded by DERC is different. For BRPL it is 7.25 per cent, for BYPL it is 8.11 per cent and for TPDDL it is 10.47 percent, he said.  "Since the cost of fuel surcharge under u/s 64(4) is almost the same for all discoms, the percentage differential tariff should have been the same," Gandhi added.  
 Discom sources defended the PPAC and said that it was in line with the DERC's regulations orders issued in different time periods for different discoms.  

"The PPAC is recovered to ensure timely pass through of power purchase cost, which is dependent upon the coal and gas prices, to the consumer. It is a statutory mandate and the process is very transparent and validated by the regulator," they said.  Without PPAC, discoms will have liquidity stress and they will have no money to pay the power generation companies, sources added.

(Except for the headline, this story has not been edited by DNA staff and is published from PTI)