Delhi govt announces significant reduction in PPAC for power bills

New Delhi: In a major move aimed at providing financial relief to Delhi’s residents, the Delhi government has announced a significant reduction in the Power Purchase Adjustment Charge (PPAC) for electricity bills. The revised PPAC rates, effective from December 2024, will lower the electricity costs for consumers across the capital.

The PPAC for the city’s power distribution companies (DISCOMs) — BRPL, BYPL, and TPDDL — has been reduced from previous levels of 35.83 per cent, 38.12 per cent, and 36.33 per cent, respectively, to 18.19 per cent, 13.63 per cent, and 20.52 per cent. This reduction will result in a noticeable decrease in electricity bills for all consumers. Chief Minister Atishi, who also oversees the Power portfolio, attributed this significant reduction to the Aam Aadmi Party’s people-centric governance. “It is only through proper management of the power supply chain and pre-planning that the Delhi Government has been able to achieve this,” said Atishi. She also highlighted that Delhi residents enjoy uninterrupted 24-hour power supply, in contrast to neighbouring cities like Noida and Gurgaon, where power tariffs are higher, and power cuts are frequent. Atishi pointed out that the Delhi government has ensured that power distribution companies (DISCOMs) comply with regulations set by the Delhi Electricity Regulatory Commission (DERC), which approves the PPAC rates. “The DERC, as the sole authority responsible for approving the PPAC levied by DISCOMs, operates under its Tariff Regulations 2017 framework,” she explained. The PPAC is a surcharge added to electricity bills to adjust for fluctuations in the cost of purchasing power, especially when factors like fuel prices, market conditions, or unpredictable weather disrupt forecasted costs. The PPAC surcharge had increased significantly during the summer of 2024 due to a surge in electricity demand caused by an extreme heatwave. This resulted in the purchase of electricity at higher market rates, pushing up the surcharge.

Atishi explained that in summer 2024, “Delhi experienced an unprecedented peak in electricity demand due to severe summers,” which led to higher PPAC rates. She also cited the Central government’s mandate for blending more expensive imported coal with domestic coal as a factor that further drove up power costs. However, with the onset of winter and the removal of the imported coal blending requirement after mid-October 2024, the cost of power generation decreased. As a result, the PPAC was slashed, providing much-needed relief to consumers as electricity consumption typically falls in winter. Meanwhile, Delhi BJP president credited the party’s sustained pressure on the government, including public demonstrations, a memorandum to the Lieutenant Governor, and engagement with industrial groups. He highlighted the role of BJP MPs and party workers who relentlessly pushed for the reduction of the PPAC charges, which had caused distress to common citizens, traders, and industrialists alike. Atishi took a jibe at the BJP, stating, “If BJP is so keen on taking credit, it should reduce power prices in the 22 states governed by them.”