Delhi government reduces electricity surcharge, brings down prices

New Delhi [India], December 27 (ANI): In a move that will bring significant relief to the people, the Delhi government has drastically reduced a surcharge levied on power bills in the national capital.

The Power Purchase Adjustment Charge (PPAC) rates, which were previously 27.08% for BRPL, 31.6% for BYPL, and 29.33% for TPDDL, have been reduced to 18.19%, 13.63%, and 20.52%, respectively, according to an official release.

This reduction will result in lower electricity bills for all consumers across Delhi. Chief Minister Atishi, who also holds the Power portfolio, stated that this was made possible due to the honest, people-centric governance of the Aam Aadmi Party (AAP).

The Chief Minister highlighted that the Delhi Government has consistently prioritised shielding consumers from excessive tariff hikes by ensuring that power distribution companies (DISCOMs) adhere to the regulations set by the Delhi Electricity Regulatory Commission (DERC). The DERC, as the sole authority responsible for approving the PPAC levied by DISCOMs, operates under its Tariff Regulations 2017 framework, which outlines the mechanism, frequency, formulation, approval process, recovery, and adjustments related to the PPAC, the press release stated.

“It is only through proper management of the power supply chain and pre-planning that the Delhi Government has been able to achieve this,” Atishi said. She further pointed out that neighbouring cities such as Noida and Gurgaon not only have high tariffs but also experience frequent power cuts during summer. “In Delhi, on the other hand, people enjoy 24-hour power supply and, in many cases, zero electricity bills due to our policies,” she asserted.

The Power Purchase Adjustment Charge (PPAC) is a surcharge added to electricity bills to account for changes in the cost of purchasing power. It enables electricity DISCOMs to recover additional costs arising from unpredictable factors such as fuel price fluctuations, transmission charges, or other market and weather-related conditions that cannot be accurately forecasted during annual tariff planning. Consequently, DISCOMs levy PPAC to adjust for any surges in costs.

In December 2023, the PPAC rates approved by the DERC for Delhi DISCOMs were as follows: BRPL: 27.08%, BYPL: 31.6%, and TPDDL: 29.33%, according to the release.

Vide orders dated 30th October 2024 and 20th December 2024, the DERC reduced the PPAC rates to: BRPL: 18.19%, BYPL: 13.63%, TPDDL: 20.52%

In the summer of 2024, Delhi experienced an unprecedented peak in electricity demand due to severe summers. In order to ensure a 24-hour uninterrupted supply of power, the DISCOMs purchased electricity at prevalent market rates, leading to higher PPAC.

Additionally, in October 2023, the central government mandated all thermal power plants to continue blending imported coal with domestic coal to address supply shortages and rising electricity demand. The blending proportion of expensive imported coal was increased from 4% to 6%, resulting in higher costs for electricity-generating companies. This, in turn, raised power purchase costs for DISCOMs, the press release stated.

Electricity demand and consumption usually decline in winter compared to summer, leading to lower power procurement from generating companies and reduced overall power purchase costs. The blending proportion of imported coal was also reduced back to 4% (from 6% earlier) until mid-October 2024. After 15th October 2024, the requirement for blending imported coal was removed entirely, resulting in significantly reduced generation costs and lower electricity bills for consumers, the press release added.