With the cost of electricity increasing in Delhi with hike in power purchase adjustment cost (PPAC), imposed by discoms on consumers, by 4% from mid June, Delhi Chief Minister Arvind Kejriwal on Monday said the increase in power purchase adjustment cost (PPAC) won’t impact consumers.
Delhi Chief Minister said, “the people of Delhi who are getting free electricity will continue to get free electricity in future. The charge of electricity from 201 to 400 units is subsidised to half the rates, that too will continue. Come what may, the relief being given to the people of Delhi will not be affected. Whatever has happened that won’t impact consumers.”
The power purchase adjustment cost (PPAC) is a surcharge to compensate discoms for variations in the market-driven fuel costs. PPAC is applied as a surcharge on total energy cost and fixed charge component of electricity bill, officials said. The PPAC in Delhi has been increased by 4% from June 11.
Meanwhile, a power department official on Sunday said the hike was made by the power distribution companies (discoms) after approval by the Delhi Electricity Regulatory Commission(DERC) due to increase in prices of fuel like coal and gas. “The PPAC in Delhi has been increased by 4 per cent from June 11, according to the approval of the DERC,” said an official source.
According to the Ministry of Power directions on November 9, 2021, every state regulatory commission (DERC in the case of Delhi) has to place a mechanism for automatic pass through of fuel and power procurement cost in tariff for ensuring the viability of power sector, said a discom official. More than 25 states, union territories have implemented fuel surcharge adjustment formula, he said.
The PPAC is a requirement under the Electricity Act, DERC’s own tariff orders and Appellate Tribunal for Electricity (APTEL) orders. The central regulatory commission, CERC allows central PSU gencos like NTPC, NHPC and trancos, PPAC on a monthly basis. On the other hand, Delhi discoms are allowed PPAC on a quarterly basis, he said.
The PPAC is levied to off-set the increase in the fuel prices. In the latest instance, the decision to increase the PPAC is based on the blending of imported coal, increased gas prices and high prices in power exchanges, which had reached to almost ₹20 per unit, before being capped by the CERC to ₹12 per unit, officials said.
(With inputs from ANI, PTI)
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