DERC allows additional fuel surcharge of up to 8% on Delhi power bills for second month running

For a second straight month, DERC has cleared an additional FPPAS of up to 8% for May, letting Delhi discoms breach the 10% billing cap
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DERC allows additional fuel surcharge of up to 8% on Delhi power bills for second month runningEnergy Watch
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New Delhi: The Delhi Electricity Regulatory Commission (DERC) has, for the second consecutive month, permitted the capital's three power distribution companies (DISCOMs) to levy an additional fuel and power purchase adjustment surcharge (FPPAS) of up to 8 percent on consumers' electricity bills, over and above the regulatory ceiling of 10 percent per billing cycle.

What the May order says

In an order dated July 10, the DERC set the additional FPPAS for May at 7.94 percent for BSES Rajdhani Power Ltd (BRPL), 7.43 percent for BSES Yamuna Power Ltd (BYPL) and 2.21 percent for Tata Power Delhi Distribution Ltd (TPDDL).

Adding the base cap, the total FPPAS the discoms may recover works out to 17.94 percent for BRPL, 17.43 percent for BYPL and 12.21 percent for TPDDL for May 2026, according to the order.

For the two BSES discoms, the May figures are unchanged from the previous revision, while TPDDL's total has come down from 15.99 percent to 12.21 percent, officials said.

How the surcharge works

Discoms levy the FPPAS to recover fluctuations in the cost of generating and purchasing electricity caused by high fuel costs, elevated power demand or other factors.

The DERC determines the surcharge every month and calculates it as a percentage of the sum of a consumer's fixed charge and energy charge. Under the regulations, recovery through the FPPAS is capped at 10 percent in a billing cycle.

By clearing the additional component for May, the Commission allowed the discoms to recover amounts beyond the 10 percent ceiling. The order said this removed the difficulties they faced in recovering "at least the reasonable part of the increase" in power purchase costs.

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Why the discoms sought relaxation

The three discoms approached the DERC in June and July seeking the relaxation, on the ground that their actual power purchase cost for May had risen significantly against the prevailing base power purchase cost.

"The relaxation will be applicable on a month-to-month basis till further order by the Commission," the order stated.

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How it compares with April

For April, the DERC had permitted an additional FPPAS of 7.94 percent for BRPL, 7.43 percent for BYPL and 6 percent for TPDDL. The additional rates for the two BSES discoms are therefore unchanged in May, while TPDDL's additional component has narrowed to 2.21 percent.

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