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DERC hikes power tariff by 6%, govt to seek review

DERC hikes power tariff by 6%, govt to seek review

The hike will come into effect from Monday and will be applicable for the next three quarters.

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Reacting to the DERC’s decision, the Aam Aadmi Party Government said it will ask the regulator to review the hike as it will put additional burden on the consumers.

The capital’s power regulator on Friday hiked the power tariff up to six per cent by increasing the surcharge component. The hike will come into effect from Monday and will be applicable for the next three quarters. Reacting to the move, the AAP-led Delhi government — which had promised cheaper power — conveyed its disagreement and said it will “seek a review of the order” from the regulator.

The Delhi Electricity Regulatory Commission (DERC) increased the power purchase cost adjustment charges (PPAC) — a surcharge component — up to six per cent in order to compensate private discoms for variations in market-driven fuel costs.

The central, east, south and west districts, where Reliance-owned BRPL and BYPL discoms operate, will experience the maximum hike at 6 per cent. North and northwest districts, where TATA-owned TPDDL operates, will see a hike at 4 per cent. The New Delhi district will see a hike of 5 per cent.


DERC said the provisional PPAC will be applicable for the next three quarters that will be spread over nine months.
“While finalising the provisional PPAC charges, the commission has taken into account the different entitlements of the respective discoms based on preliminary prudence checks. DERC specifically observes that PPAC charges constitute a reasonable extra charge on all consumers, which will maintain constant and quality power supply by discoms,” a DERC official said.


Meanwhile, Delhi Power Minister Satyendra Jain said the government will seek “a review” of the order and “will convey its disagreement to the commission in writing”.

“The government has also decided to seek opinion for taking legal recourse against this decision — which in its view is uncalled for — since no financial burden should be passed on to consumers till all issues arising out of the functioning of power distribution companies is sorted out,” Jain said.

The minister added that DERC should “wait” for the Comptroller and Auditor General’s report on discoms before taking any decision on electricity tariffs in Delhi.

What this means for consumers:

*PPAC is the surcharge levied to compensate discoms for variations in fuel prices in the market
* On an average, the surcharge will add Rs 40-Rs 70 to electricity bills depending on power consumed
* The surcharge cannot be levied on the 8 per cent surcharge
* The percentage increase on account of PPAC will be applied as surcharge on the total energy and fixed charges billed to a consumer