Delhi Power Minister Ashish Sood on Saturday addressed the recent increase in the Power Purchase Adjustment Cost (PPAC), attributing it to a significant rise in fuel costs driven by developments in West Asia. He assured consumers that the government has taken steps to limit the impact on electricity bills.
PPAC Mechanism Explained
Speaking to ANI, Sood clarified that the PPAC is not a new charge but an established provision under the country's electricity laws. "The country's electricity laws permit power companies to adjust for the rising costs of the fuel used to generate electricity," he said.
Fuel Costs Surge Due to West Asia Crisis
The minister explained that fuel costs have surged over the past few months because of 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 stated.
Regulatory Intervention Keeps Hike Minimal
Sood highlighted that regulatory intervention helped keep the adjustment lower than the actual rise in costs. "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 elaborated.
Government Commitment to Consumer Protection
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 is closely tracking the situation and will continue efforts to shield consumers from higher costs. The announcement comes amid rising global fuel prices due to geopolitical tensions in West Asia, which have affected power purchase costs across the region.
