Delhi Chief Minister Arvind Kejriwal on Monday said the relief being provided to the electricity consumers in the national Capital will be continued further. The CM’s statement came after the cost of electricity in Delhi has increased with hike in power purchase adjustment cost (PPAC), imposed by DISCOM on consumers, by 4 per cent from mid June.
"The State Government will continue its electricity subsidy scheme providing 200 units of free electricity to the households opting for it. The Government's relief will continue. Come what may, the relief being given to the people of Delhi will not be affected," he said.
Under the electricity subsidy, utilisation of up to 200 units of electricity remains free, while those utilising between 201 to 400 units of electricity receive approximately 50 per cent subsidy.
According to an official of the electricity department, the rise was implemented by the power distribution companies (discoms) with Delhi Electricity Regulatory Commission (DERC) clearance due to an increase in the cost of fuel such as coal and gas. PPAC is a surcharge given to compensate the discoms for variations in the market-driven fuel costs (additional costs on account of increase in coal and gas prices).
The increase in PPAC has come ahead of the inflated prices of imported coal by the Central coal generating stations, increased prices of gas, and high prices of power exchanges, which had reached almost Rs 20 per unit before being capped by the Central Electricity Regulatory Commission (CERC) to Rs 12 per unit.
According to officials, since 2002, the cost of buying power for Delhi DISCOMS has increased by around 300 per cent, a cost over which DISCOMS have no control, whereas the retail tariff has risen by around 90 per cent in the corresponding period.
The Power Cost Adjustment on an electricity bill statement is computed by multiplying the amount charged or credited by the number of kilowatt-hours used. For example, if the amount charged is .03540, and 1000 kwh was used during the billing period, the Power Cost Adjustment would be a charge of Rs 2,810.82.
As per DISCOM, timely review of the PPAC is a requirement under the Electricity Act, DERC's own tariff orders and Appellate Tribunal for Electricity (APTEL) orders.
As per 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.
More than 25 States/UTs have implemented Fuel surcharge adjustment formula / mechanism. Surat and Ahmedabad have PPAC surcharge of up to 50 per cent.