Electricity prices are rising in Delhi, with bills rising as PPA costs climb by 4%

The cost of energy in Delhi is anticipated to rise due to the increase in the Power Purchase Adjustment Charge (PPAC) of roughly 4%.

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Electricity in Delhi will cost more due to a 4 percent increase in the Power Purchase Adjustment Charge (PPAC). Due to a decision made by the Delhi Electricity Regulatory Commission, the PPAC would rise by roughly 4% on June 11, 2022. (DERC). Representatives of the power distribution company (DISCOM) claim that the PPAC is calculated to counteract the increase in fuel prices.

Before the Central Electricity Regulatory Commission (CERC) set a cap on power exchange rates at Rs 12 per unit, they had risen to roughly Rs 20 per unit, exceeding inflated import coal prices levied at central coal producing plants, rising gas prices, and rising power prices.

According to officials, Delhi DISCOMS have reported a nearly 300 percent increase in the cost of their purchasing power since 2002, a cost over which they have no control, while retail prices have increased by around 90 percent over the same time period.

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The Power Purchase Adjustment Charge is an additional charge that DISCOMS impose on producing companies to cover changes in the market-driven fuel prices brought on by increases in the price of coal and gas (PPAC).

Directives from the Ministry of Power on November 9, 2021 required every state regulatory authority (DERC in the case of Delhi) to put in place a mechanism for the automatic pass-through of fuel and power procurement costs in tariff in order to ensure the profitability of the power sector.

The DERC’s Electricity Act mandates PPAC. Central PSU gencos like NTPC, NHPC, and trancos receive approval from the central regulatory commission (CERC) on a monthly basis (PPAC). The official stated that PPAC is only approved for Delhi discoms once every three months.