Power purchase costs up 31% amid West Asia crisis, Delhi allows only 2.4% electricity tariff hike: Delhi's Power Minister
New Delhi, June 13
Delhi Power Minister Ashish Sood on Saturday said that the recent increase in the Power Purchase Adjustment Cost was necessitated by a sharp rise in fuel costs linked to developments in West Asia, while assuring consumers that the government would limit the impact on electricity bills.
Speaking to ANI, Sood said the PPAC mechanism is an established provision under the country's electricity laws and not a new charge.
"The Power Purchase Adjustment Cost (PPAC) is not a new mechanism. The country's electricity laws permit power companies to adjust for the rising costs of the fuel used to generate electricity," he said.
Explaining the reason behind the latest increase, the minister said fuel costs have risen significantly in recent months.
"Fuel costs have been surging over the past few months due to the situation in West Asia and other factors. Consequently, if one averages out the power purchase costs across various sources, there was a 31 per cent increase last month," Sood said.
He said regulatory intervention had helped keep the adjustment lower than the actual rise in costs.
"However, up to March 31st, the DRC, following government intervention, had allowed a PPAC of only 14.5 per cent. Even now, despite a 31 per cent rise in costs, an increase of only 2.4 per cent has been permitted," he said.
According to Sood, the latest revision takes the PPAC level from the earlier 14.5 per cent to nearly 18 per cent.
"Following the previous 14.5 per cent rate (valid until March 31st), a 2.4 per cent hike has now been granted due to the fuel cost increases caused by the West Asia crisis. This brings the figure from 14.5 per cent to approximately 17.5 per cent or 17.9 per cent," he said.
The minister reiterated that the Delhi government remains focused on protecting consumers from a larger burden arising from higher power procurement costs.
"Our government is fully committed to ensuring that the impact of electricity prices on consumers is minimised as much as possible," Sood said.
He added that the government was closely tracking the situation and would continue efforts to shield consumers from higher costs.
— ANI
Reader Comments
At least the government is trying to shield us from the full impact. With West Asia tensions and global fuel prices skyrocketing, this is a reasonable move. Better than surprise bills that break the bank. Good job Delhi govt! 👍
My electricity bill already went up by ₹200 last month. Small amount but with everything else getting expensive, it's pinching. Why should common man pay for global crises? Government should think long-term - invest in solar and wind power to reduce dependence on imported fuel. Jai Hind.
2.4% hike is manageable but the 31% cost increase is alarming. Really shows how vulnerable India's power sector is to global shocks. Need to accelerate RE targets - Rajasthan and Gujarat have huge solar potential. Also, why can't Delhi generate its own power? Get your own plants instead of buying expensive electricity!
Interesting how geopolitical events in West Asia affect household bills in Delhi. Globalised economy has its downsides. The 2.4% increase seems modest given the circumstances. I've lived in countries where such adjustments are automatic and much higher. India's regulatory system seems to work in favour of the consumer here.
Please explain the PPAC mechanism in simple Hindi for the common man. Most people don't understand these technical terms. And why is the increase calculated on previous month's 14.5%? Very confusing. Need more public awareness campaigns. The government should also give subsidies to lower income group families especially in this heat.
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