Electricity bills in the nation’s capital have risen by 2% to 6%, starting in mid-June, with electricity regulator Delhi Electricity Regulatory Commission (DERC) allowing distribution companies (discoms) to levy a “additional” surcharge on the power purchase adjustment cost (PPAC). consumers to offset higher coal and gas prices and increased reliance on short-term power purchases (STPP), officials familiar with the matter said.
The surtax increase took effect on June 10 of this year and will be reflected in bills received by consumers in July.
The supplemental PPAC will be in effect until August 31 this year or until new orders are placed, the DERC said in an order issued June 10. HT has a copy of the prescription.
No immediate reaction was available from the DERC.
The PAC is a surcharge imposed on consumers to compensate for the disadvantages associated with market-induced variations in fuel costs (additional costs due to the increase in coal and gas prices). It is levied on every bill and in Delhi this surcharge is supposed to be reviewed quarterly as per the orders of the Union Department of Energy. In fact, the cost of purchasing electricity represents around 80% of the total cost borne by distribution companies.
The DERC Order, said: “I am hereby instructed to convey that the Commission, pursuant to Regulation 172 of the DERC Regulations (Terms and Conditions for the Determination of Tariff), 2017 and Regulation 37 of the DERC Regulations (business plan), 2019 tentatively allows 6%, 4%, and 2% PPACs to BYPL, BRPL, and TPDDL respectively, effective the date of issuance of this letter, beyond the approved (PPAC) . »
The DERC order said the additional PPAC was authorized due to the electric utilities’ deteriorated cash position, failure to include short-term power purchase (STPP) in the formula PPAC, increased reliance on STPP in April and May 2022, and the impact of integrating imported coal into power generation as well as rising gas prices.
Explaining the reason for the additional PPAC, the power regulator said BRPL (BSES Rajdhani), BYPL (BSES Yamuna) and TPDDL (BSES Tata) reported cash shortfalls to the tune of ₹168 crore, ₹132 crore and ₹61 crore, respectively, in the month of April 2022.
In addition, BSES Rajdhani reported a cash shortfall of ₹166 crore for May 2022, while BSES Yamuna reported a cash surplus of ₹38 crore.
The order stated that BSES Yamuna deferred power purchase payments from ₹163 crores and other delayed expenses amounting to ₹74 crore due to lack of cash.
“BRPL argued that it could not fully meet its payment obligations and postponed payment for the purchase of electricity for April 22 and May 22 by an amount of ₹178 crore. TPDDL indicated that it had made up for a cash shortfall of ₹422.92 crores through short-term loans,” DERC said.
The DERC stated that the surplus created, if any, through additional PPAC will reduce the cost of ownership burden on end consumers.
The Delhi government has not commented on this.
Opposition leader and BJP MP Ramvir Singh Bidhuri demanded the hike be withdrawn “immediately”.
He said the “power shock” came after the Delhi government recently imposed conditions on the electricity subsidy scheme.
In May this year, Delhi Chief Minister Arvind Kejriwal said his government would provide an electricity subsidy only to residents of the nation’s capital who ‘opt in’ for the same. “From October 1, only consumers who opt in will receive the subsidy,” he said in an online briefing on May 5.
At present, Delhi consumers get a ‘zero’ electricity bill of up to 200 units of electricity and a subsidy of ₹800 on the consumption of 201 to 400 units of energy per month.