Delhi power bills jump 2-6% as key surcharge hiked

The surcharge increase came into effect from June 10 this year and will have reflected in bills consumers received in July.

Power bills in the national capital have increased 2% to 6%, starting mid-June, with power regulator Delhi Electricity Regulatory Commission (DERC) allowing distribution companies (discoms) to levy an “additional” power purchase adjustment cost (PPAC) surcharge on consumers to offset a rise in coal and gas prices and the increased dependency on short-term power purchases (STPPs), officials in the know of the matter have said.

(Representative image/HT Archive)

The surcharge increase came into effect from June 10 this year and will have reflected in bills consumers received in July.

The additional PPAC will be in effect till August 31 this year or till further orders, DERC said in an order issued on June 10. HT has a copy of the order.

No immediate reaction was available from the DERC.

The PAC is a surcharge on consumers to compensate the discoms for variations in the market-driven fuel costs (additional costs on account of increase in coal and gas prices). It is levied on every bill and, in Delhi, this surcharge is supposed to be revised on a quarterly basis, in accordance with the orders by the Union ministry of power. In fact, power purchase cost accounts for about 80% of the total cost incurred by distribution companies.

The DERC order, said, “I am hereby directed to convey that the Commission in accordance with Regulation 172 of DERC (Terms and Conditions for Determination of Tariff) Regulations, 2017 and Regulation 37 of DERC (Business Plan) Regulations, 2019 provisionally allows additional PPAC of 6%, 4% and 2% to BYPL, BRPL and TPDDL respectively, from the date of issuance of this letter, over and above the approved (PPAC).”

The DERC’s order stated that the additional PPAC has been allowed because of the deteriorated cash-flow position of power utilities, the non-inclusion of short-term power purchase (STPP) in PPAC formula, the increased dependency on STPP in April and May 2022, and the impact of blending imported coal in power production as well as the increase in gas prices.

Explaining the reason behind the additional PPAC, the power regulator said that BRPL (BSES Rajdhani), BYPL (BSES Yamuna) and TPDDL (BSES Tata) have reported cash deficits to the tune of ₹168 crore, ₹132 crore and ₹61 crore, respectively, in the month of April 2022.

Further, BSES Rajdhani reported a cash deficit of ₹166 crore for May 2022, while BSES Yamuna reported a cash surplus of ₹38 crore.

The order said BSES Yamuna deferred power purchase payments of ₹163 crore and delayed other expenses amounting to ₹74 crore due to a cash shortfall.

“BRPL has submitted that they could not meet their payment obligations fully and deferred power purchase payment for April ’22 and May ’22 amounting to ₹178 crore. TPDDL has submitted that they have met a cash shortfall of ₹422.92 crore through short-term loans,” the DERC said.

DERC said the surplus created, if any, through additional PPAC will reduce the burden of carrying cost on end-consumers.

The Delhi government did not comment on the matter.

Leader of opposition and BJP MLA Ramvir Singh Bidhuri demanded that the hike be withdrawn “immediately”.

He said the “power shocker” has come after the Delhi government recently imposed conditions on the power subsidy scheme.

In May this year, Delhi chief minister Arvind Kejriwal had said his government will provide a power subsidy to only those residents of the national capital who would “opt” the same. “From October 1, only those consumers who opt for it will be provided the subsidy,” he had said during an online briefing on May 5.

At present, consumers in Delhi get a “zero” power bill up to 200 units of electricity and a subsidy of ₹800 on consuming 201 to 400 units of power per month.