DERC to review fuel surcharge, power price in Delhi may go up in November

DERC set to levy surcharge to help private companies adjust their power purchase cost.

By: Press Trust of India | New Delhi | Published: October 6, 2014 3:48:30 am

Power price in the city may go up next month as Delhi Electricity Regulatory Commission (DERC) is all set to levy a fuel surcharge to help the private distribution companies adjust their power purchase cost.

While hiking the power tariff by up to 7.5 per cent for domestic consumers, the DERC in July had withdrawn Power Purchase Adjustment Cost (PPAC) of around 8 per cent till October.

Chairman of Delhi Electricity Regulatory Commission P D Sudhakar said a decision on “readjusting” the tariff will be taken by end of the month after examining the petitions of the three private discoms to review the PPAC.

“We will take a decision on the fuel surcharge based on petitions of the discoms. A decision will be taken by end of this month and if there is a hike in tariff, then it will come into effect from November,” Sudhakar said.

The regulator had introduced PPAC in 2012 to help the private power distribution companies recover additional cost on account of increase in coal and gas prices.

Delhi gets power from a number of gas and coal-based power generation plants.

Power experts said the three discoms Tata Power Delhi Distribution Ltd, BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd may see a hike in the range of 6 to 8 per cent.

While hiking the power tariff by up to 7.5 per cent for domestic consumers, the DERC in July had withdrawn PPAC of around 8 per cent for three months.

The withdrawal of the PPAC resulted in marginal decline of tariff for the consumers, whose monthly consumption does not exceed 400 units.

In January, the DERC had hiked the fuel surcharge to the tune of 8 per cent for BSES Yamuna Power Ltd, 6 per cent for BSES Rajdhani and 7 per cent for Tata Power Delhi Distribution Ltd.

The private power distribution companies, particularly, BRPL and BYPL, have been demanding significant hike in tariff, citing rise in power purchase cost.

Both the discoms supply power in 70 per cent areas in Delhi. According to DERC figures, the private discoms operating in the city have a revenue gap of a whopping Rs 19,500 crore.

As per official figures, around 80-90 per cent of total revenue of discoms goes into purchasing power from central and state government owned entities through long term power purchase agreement, at rates determined by the central and state regulators.

The experts said discoms’ cost of buying power from generating companies has increased by around 300 per cent in the last two years while the power tariff, in the corresponding period, has risen by around 70 per cent.

The city has seen a series of hike in power tariff in the last two years.

The tariff was hiked by 22 per cent in 2011 followed by five per cent hike in February 2012. The tariff was hiked by up to two per cent in May 2012 year and again by 26 per cent for domestic consumers in July 2012.

The tariff was hiked by up to three per cent in February last year and again by five per cent in August last.

The cost of buying power has increased primarily on account of an increase in the input prices of raw material like coal and gas, officials said.

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