Power rate hike may be put on hold

NEW DELHI: The power tariff hike scheduled from next month may be shelved as Delhi Electricity Regulatory Commission (DERC) is first going to seek a clarification from the Election Commission due to the model code of conduct. A new power purchase adjustment charges (PPAC) surcharge is scheduled to be announced by the end of the month. If the EC gives a green signal, the surcharge expected to be announced by Friday will be implemented from November 1.Sources say a surcharge of 5-7% could be likely.
The EC can notify bypolls on Tuesday following which the model code of conduct will be in place. "In this situation, the EC will bar any new announcements or schemes till the bypolls are over on November 25. DERC is waiting for a clarification before it proceeds with the PPAC announcement," said sources.
Last week, discoms BSES Yamuna, BSES Rajdhani and Tata Power Delhi submitted their petition to the regulator for PPAC. BYPL has sought an increase of 17.1%, BSES Rajdhani 7.26% and Tata Power for 9% due to fuel costs. The PPAC surcharge is for costs incurred by discoms between July-September 2014 and will be applicable in consumer bills from November 1 to January 31, 2015.
The discoms, particularly BRPL and BYPL, have been demanding significant hike in tariff citing rise in power purchase cost. Official figures show around 80-90% of total revenue of discoms goes into purchasing power from central and state government entities through long-term power purchase agreements at rates determined by the central and state regulators. DERC had introduced PPAC in 2012 to help discoms recover additional cost due to increase in coal and gas prices.