Delhi power rates to go up by 7%

The rise in rate is to adjust the increased cost of power purchase by distribution companies

Consumers in Delhi will have to pay more for the electricity they consume as the Delhi Electricity Regulatory Board (DERC) has increased tariff by 2.5-7 per cent in different areas with effect from Saturday for three months that is till February 2015.

The increase in tariff is to adjust for the higher cost of power purchase by Power Distribution Companies (discoms).

This would lead to an increase in tariff of Reliance Power-owned BSES Yamuna Power limited by 4.5 per cent and 7 per cent for BSES Rajdhani Power. For Tata Power Delhi Distribution, the increase is 2.5 per cent.

The increase would be reflected in the total energy and fixed charges billed to consumers, said DERC.

Power purchase adjustment cost (PPAC) is a surcharge given to compensate the discoms for variations in market-driven fuel costs (additional costs on account of increase in coal and gas prices).

According to industry sources, the discoms in Delhi buy 80-85 per cent of their electricity from central generating stations, which are governed by the CERC and are able to pass on the cost on the discoms. However, the discoms, governed by state regulators - DERC in this case - are unable to do so.

"While the cost of buying power for Delhi discoms has increased by 300 per cent, the retail rate has risen by only 87 per cent during the period," said a discom executive.

With this order, the regulator has allowed the discoms to pass through the cost to consumers.

It has, however, clarified that PPAC is a component of the rate and its application shall be in the same manner as with the rate revision.

"The Aam Aadmi Party strongly condemns the decision of hiking electricity tariff on petitions filed by private Power Distribution Companies (DISCOMs)," said AAP on Thursday.

"We feel that the DERC has failed to perform its duty as an independent regulator. Its decisions seem to benefit the DISCOMs, which are under CAG scrutiny. The DERC should have waited for the CAG audit to be completed before revising rates."