Hike in electricity surcharges necessary: Delhi power minister

Delhi power bills will rise modestly after DERC allows surcharge due to global fuel price spikes, though subsidies protect 3.23 million consumers.

Days after the Delhi Electricity Regulatory Commission (DERC) allowed power distribution companies (discoms) to raise a surcharge to recover higher power procurement costs, power minister Ashish Sood on Saturday said the revision was necessary due to an unprecedented rise in global fuel prices triggered by the West Asia crisis and other international factors.

Delhi power minister Ashish Sood (HT Archive)

The minister also said that the government will ensure the burden of rising energy costs does not fall disproportionately on the people of Delhi.

Delhi residents will see a modest increase in their electricity bills after DERC allowed discoms to raise the surcharge, with the biggest impact falling on consumers in east and central Delhi served by BSES Yamuna Power Limited (BYPL).

The increase relates to the Fuel and Power Purchase Adjustment Surcharge (FPPAS), a variable charge that allows discoms to recover sudden increases in the cost of buying electricity. DERC on Wednesday approved higher surcharge limits for April 2026, citing a sharp rise in power purchase costs driven by higher fuel prices and global market uncertainties.

Explaining the mechanism, Sood said it is a statutory condition provided under the country’s electricity laws and is not a new arrangement. The provision enables discoms to adjust for fluctuations in fuel and power procurement costs on a monthly basis.

Sood said timely intervention by the Delhi government ensured that the burden on consumers remained minimal.

“Even though power procurement costs rose by 31%, DERC has allowed only an average increase of 2.4% in PPAC. Earlier, PPAC had been capped at 14.5% till March 31. With the latest revision, it stands at approximately 17.5% to 17.9%,” he said.

PPAC is a nationally accepted regulatory framework and is routinely implemented across the country under existing electricity laws, Sood said. He added that the latest DERC order balances the financial viability of discoms with consumer interests.

He reiterated that consumers receiving electricity subsidies from the government will remain completely insulated from the impact of the PPAC adjustment. Approximately 3.23 million consumers out of nearly 7.4 million will remain unaffected due to this revision, Sood said.

“I want to categorically state that all consumers receiving Delhi government electricity subsidies will face absolutely no impact on their electricity bills due to this regulatory adjustment. There is no reason for subsidised consumers to worry,” he said.

The minister further alleged that attempts are being made to spread confusion and create unnecessary apprehensions. “Our government stands firmly with consumers, particularly those benefiting from power subsidies. We are closely monitoring the situation,” he added.

Sood also noted that DERC’s latest order includes provisions such as deferred recovery mechanisms for discoms while limiting the immediate impact on consumers. Households served by TPDDL will see virtually no impact, while all subsidised consumers remain fully protected, he said.