Electricity bills up 1.78% on fuel & power purchase adjustment

Bhopal: Electricity tariff has gone up by a marginal 1.78% from Sunday as the distribution companies released the fuel and power purchase adjustment surcharge (FPPAS) for the month.
This 1.78% hike will be applicable over the tariff decided by the regulator for this financial year and will be effective till October 23. Last month from August 24 to September 23, an increase of 4.48% was levied.
This has been done under a recent amendment of MPERC allowing discoms to increase tariff month on month.Sources said that this FPPAS is based on the difference between the actual power purchase cost and the estimated power purchase cost for the month of June this year.
This month the FPPAS adjustment has reduced compared to the last month because, the difference between actual and estimated power purchase cost for the month of June this year was lesser than the same for month of May this year.
There were rains and we had surplus electricity and we were able to sell that in the market, thus the overall cost of power purchase remained less than previous month in the month of June, leading to less FPPAS, said sources from the discom.
As per the recent amendment to MPERC (Terms and Conditions for Determination of Tariff for Supply and Wheeling of Electricity and Methods and Principles for Fixation of Charges) Regulations, 2021—wherein the regulator allowed that, ‘Fuel and power purchase adjustment surcharge (FPPAS) shall be calculated and billed by the distribution licensee to consumers, automatically, without going through the regulatory approval process, on a monthly basis’.
Power tariff is decided by the regulator on the basis of estimated cost of production of energy for a financial year, and if there is an increase or decrease in costs after the completion of financial year, discoms move true up petitions before the regulator. Now after new regulations, the difference in estimated cost of fuel for production of energy in a particular month and actual cost could be levied on consumers in the next month in form of increase in tariff.
Earlier this year, the regulator has increased the power tariff by 1.65%, this FPPAS are applied over and above this increase and keep changing month on month as they are based on the actual cost of power purchase for the previous months.
While seeking power tariff hike for this financial year, discoms had sought a tariff hike of 3.2% against the claimed expected revenue gap of Rs 1527 crores, however of this claimed revenue gap MPERC approved only Rs 795 crore and thus allowed a power tariff hike of only 1.65% for this financial year.