Annual power bill to go up by Rs 3,240 crore for Gujarat consumers

GERC allows state discom GUVNL to raise FPPPA charges by 20 paise, to add monthly burden of Rs 270 crore on users

Power bill for consumers in Gujarat is set to get costlier by an additional Rs 270 crore per month and Rs 3240 crore per annum from June 2022 onwards.

The power regulator Gujarat Electricity Regulatory Commission (GERC) has allowed state discom Gujarat Urja Vikas Nigam Ltd (GUVNL) to hike fuel and power purchase price adjustment (FPPPA) charges by an additional 20 paise per unit effective from May 1.

With GUVNL already raising the same by 10 paise per unit in April, with the effective increase on consumers at 30 paise per unit from the next billing cycle.

According to energy expert K K Bajaj, this would lead to an additional burden of Rs 270 crore per month and Rs 3240 crore per annum for the 13 million consumers of state discoms in Gujarat from May-June 2022.

State discoms including Uttar Gujarat Vij Company Ltd (UGVCL), Paschim Gujarat Vij Company Ltd (PGVCL), Madhya Gujarat Vij Company Ltd (MGVCL) and Dakshin Gujarat Vij Company Ltd (DGVCL) sell power to GUVNL which then supplies the same to end consumers including residential, commercial, industrial and agricultural across the state.

GUVNL recently informed the four discoms that it had received approval from GERC that allowed it to recover additional FPPPA charges of 0.20 paise per unit out of the unrecovered FPPPA for FY'22, effective from May 1, 2022.

The latest increase now takes the effective FPPPA charges on power bills to Rs 2.50 per unit, leading to additional tariff of Rs 270 crore per month from May-June billing cycle. The agricultural users are, however, an exception as the government provides subsidies for the category.

"Typically, GUVNL raises FPPPA charges by 10 paise every quarter without prior approval from GERC just as it did in April. However, with coal prices going up and gas not being available, the discom had sought an approval for an additional 20 paise hike from GERC which gave the nod recently," said Bajaj.

Currently, power tariffs in Gujarat vary from Rs 3.50 per unit to Rs 7 per unit, depending on consumer categories.

However, Bajaj's contention is that while GERC has claimed that it has not increased tariffs in Gujarat for the last six years, there has been an indirect increase in tariffs by 44 per cent on account of hikes in FPPPA charges allowed to GUVNL.