Discoms cannot levy 8 per cent surcharge on latest tariff hike

Delhi's power regulator DERC has directed private power distribution companies not to levy eight per cent additional surcharge on the tariff hike it effected from this month.
The Delhi Electricity Regulatory Commission had increased the tariff by upto three per cent from February 1 to adjust the rise in power purchase cost of distribution companies. The hike was effected as per provision of its Power Purchase Adjustment Cost (PPAC) policy.
While announcing a 26 per cent hike in tariff for domestic consumers last year, DERC had granted the discoms to levy an additional 8 per cent surcharge on the overall bill to help them recover past losses.

On January 31, the DERC in an order had hiked the tariff by three per cent for consumers of BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd while the increase for those getting electricity from Tata Power Delhi Distribution Ltd was fixed at 1.5 per cent.
"Eight per cent surcharge should not be levied on Power Purchase Adjustment Cost," the DERC said in an order three days back.
On similar ground, the regulator has also asked the discoms not to levy PPAC on eight per cent surcharge.

The DERC issued the order as there has been confusion on the issue, said an official.

The regulator also asked the discoms to levy PPAC charges after considering rebate on energy charges available to certain section of the consumers.
For the last five years, Delhi government has been providing subsidy of Rs 1 per unit for domestic customers whose monthly power consumption does not exceed 200 units.
"The discoms should levy PPAC after considering rebate on energy charges available to the consumers," the order said.
The DERC also directed the discoms not to levy 8 per cent surcharge on the load surcharge as a penalty of 30 per cent is already inherent in the load violation surcharge.

Asked about the demand of the discoms to hike the tariff, the official said no decision has been taken in this regard.
The Delhi government had last week offered a bailout package to Tata Power Delhi Distribution Ltd by infusing fresh equity of Rs 245 crore into the company to help it tide over its financial crisis. The government has 49 per cent share in TPDDL.
Over a year ago, Delhi government had offered a similar bailout package to Reliance Infrastructure-backed discom BSES by infusing fresh equity of Rs 500 crore to the company. Reliance had infused Rs 520 crore and the total amount of Rs 1,020 crore was used for getting a loan of Rs 5,000 crore from IDBI bank.

The DERC had a few days back shot off a letter to the Chief Minister seeking bailout package for the private power distribution companies.