The DERC had introduced this in 2012 to help discom recover additional costs on account of costlier coal and gas. The DERC had introduced this in 2012 to help discom recover additional costs on account of costlier coal and gas.

In a move that could lead to a rise in power tariff in Delhi, the appellate tribunal for electricity has directed the capital’s power regulators to finalise the pending power purchase adjustment cost (PPAC) within three weeks.

If the petitions of the three discoms are accepted by the Delhi Electricity Regulatory Commission (DERC) , the capital is likely to see a tariff hike of 5 per cent to 20 per cent.

Stating that it would have to “face the consequences” for non-compliance of the order, the tribunal has directed the DERC to determine the PPAC component for the third and fourth quarter of the financial year 2014-15.

The PPAC is a surcharge levied to compensate discoms for variations in fuel prices in the market.

The DERC had introduced this in 2012 to help discom recover additional costs on account of costlier coal and gas.

Reacting to the development, the DERC Chairman P D Sudhakar told The Indian Express, “We are now reading the detailed order. Any further action would be taken after that.”

The appellate tribunal’s directive comes after the Tata-owned discom TPDDL moved the tribunal, challenging a November 14 decision by the DERC.

In that order, the DERC had withdrawn the provisional PPAC surcharge. TPDDL had said that “suffering huge financial crunch” on account of non-determination of the PPAC on “time-bound basis”. The DERC, on November 13 last year, had given its nod to fuel surcharge of 7 per cent for BSES Yamuna Power, 4.5 per cent for BSES Rajdhani Power and 2.5 per cent for Tata Power.

However, a day later it had withdrawn the surcharge stating that various power generating companies, including NTPC “have provided only part of the information regarding the pricing of fuel and billing of power generated at their stations” and that a “fresh decision” would be taken after “further examination” of the claims.

The increase in the tariff due to the levy of surcharge in November last year had lead to standoff between the AAP and the power regulator.

The AAP had condemned the tariff hike, saying that DERC has failed to perform its duty as an independent regulator and its decision seem to benefit the discoms.

What’s PPAC

Power purchase adjustment cost is a surcharge levied to compensate the discoms for variation in fuel costs in the market. It was introduced in 2012. Delhi’s three discoms have said that the cost at which they buy power from public sector units has gone up and increase in other costs such as rail freight for transporting coal have pushed up the price.

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