New Delhi: Delhi power minister Ashish Sood said Saturday that the latest fuel and power purchase adjustment surcharge (PPAC) hike was necessitated by a sharp rise in global fuel prices amid the West Asia crisis, which pushed the city’s power procurement costs up by 31% in the past month.
The Times of India had reported that electricity bills will rise for many consumers after the Delhi Electricity Regulatory Commission (DERC) approved a higher PPAC. Bills are expected to increase by about 5.7% for BSES Yamuna Power Ltd (BYPL) consumers in east and central Delhi and 3.4% for BSES Rajdhani Power Ltd (BRPL) consumers in south and west Delhi, while Tata Power Delhi Distribution Ltd (TPDDL) consumers are unlikely to see any noticeable change.
Minister explains PPAC mechanism
“Power Purchase Adjustment Cost (PPAC) is not a new arrangement. The electricity laws of the country already permit power companies to adjust for the rising cost of fuel used to generate electricity. Due to the situation in West Asia and other prevailing circumstances, fuel costs have risen sharply, leading to a 31% increase in power procurement costs during the past month,” Sood said.
The minister added that despite the surge in generation costs, government intervention helped shield consumers from most of the impact. “Even though power procurement costs rose by 31%, the DERC has allowed only an average increase of 2.4% in PPAC. Earlier, the PPAC had been capped at 14.5% till March 31. With the latest revision, it stands at approximately 17.5–17.9%,” Sood said.
Historical context of PPAC
Sood further said that since the last tariff order was issued by DERC on Sept 30, 2021, the PPAC currently charged by discoms reflects the gap between the power purchase price on that date and prevailing rates in 2026. “This means the PPAC being recovered at present captures the increase in power procurement costs over the past nearly five years,” he said.
He said the move aimed to balance rising procurement costs while limiting the burden on consumers, adding that subsidy beneficiaries would remain insulated. “All consumers receiving Delhi government electricity subsidies (based on the number of units consumed) will face absolutely no impact on their electricity bills due to this regulatory adjustment,” Sood said.
Reactions from trade bodies and political parties
Chamber of Trade and Industries chairperson Brijesh Goyal termed the hike a “summer shock” and urged chief minister Rekha Gupta to provide relief to traders, warning that higher tariffs would raise business costs. He said commercial and industrial power rates in Delhi could become 15–20% higher than in neighbouring Haryana and Uttar Pradesh, adding to financial pressure on traders and potentially pushing up prices of goods.
Reacting to the PPAC hike, the Aam Aadmi Party (AAP) termed it “another inflation blow” by the BJP government, while the Congress alleged that power distribution companies had been allowed to pass on the burden to consumers at a time when electricity demand peaks during Delhi’s summer. AAP said that their government had provided relief through free electricity, but BJP was now increasing power costs and burdening common households.
Delhi Congress president Devender Yadav said the hike would further strain residents already hit by rising prices of petrol, diesel, LPG and CNG.
Meanwhile, Delhi BJP spokesperson Praveen Shankar Kapoor said the government had ensured the minimum possible increase. He added that over 42 lakh of Delhi’s 63 lakh domestic consumers who receive free electricity would see no impact, while the effect on others would be minimal.
Additional information
You Can Also Check: Gold Rate in Delhi | Silver Rate in Delhi | Bank Holidays in Delhi | Public Holidays in Delhi | Delhi AQI | Weather in Delhi | Petrol Price in Delhi | Diesel Price in Delhi | CNG Price in Delhi | LPG Price in Delhi
Stay updated with the latest Delhi news. Download the TOI App.
About the Author: Alok K N Mishra is a New Delhi–based journalist with the Times of India, where he covers politics, governance and public policy. He follows the forces that shape national political behaviour, elections and policy making, and spends much of his time analysing the ever-changing Indian politics and governance dynamics. Before moving to the national capital, he reported extensively for years from Bihar and Jharkhand, gaining insights and experiences that continue to shape his understanding of politics, governance, administration, and public affairs and communication.
