Power procurement cost hike won’t impact consumers, says Sood

Power Minister Ashish Sood on Saturday said that despite a 31% rise in power procurement costs due to a surge in global fuel prices, consumers in the Capital receiving subsidised electricity will remain almost “completely insulated” and face no impact on their bills.

Addressing concerns over the Power Purchase Adjustment Cost (PPAC) revision, Mr. Sood said the government will ensure the burden of rising energy costs does not fall disproportionately on the people. “Consumers receiving electricity subsidies from the Delhi government will remain completely insulated from the impact. Even though power procurement costs rose by 31%, the Delhi Electricity Regulatory Commission (DERC) has allowed only an average increase of 2.4% in PPAC. Earlier, the PPAC had been capped at 14.5% till March 31,” the Minister said, adding that with the latest revision, it now stands at approximately 17.5-17.9%.

Mr. Sood said the adjustment had become necessary due to an unprecedented rise in global fuel prices triggered by the ongoing West Asia crisis. The Minister said the PPAC is a statutory mechanism provided under the country’s electricity laws and not a new arrangement.

“The provision enables electricity distribution companies to adjust for fluctuations in fuel and power procurement costs on a monthly basis,” he said. Mr. Sood said the latest DERC order strikes a careful balance between maintaining the financial viability of power distribution companies and safeguarding consumer interests.

No reason to worry

Claiming that attempts are being made to create confusion and unnecessary apprehensions among the public, Mr. Sood said, “I want to categorically state that all consumers receiving government electricity subsidies will face absolutely no impact on their electricity bills due to this regulatory adjustment. There is no reason for subsidised consumers to worry.”

The Minister said the government will closely monitor the situation. Power regulator DERC on Friday allowed Delhi’s power distribution companies to recover a higher fuel and power purchase adjustment surcharge from consumers amid the rising electricity purchase costs.