Surcharge not a tariff hike, DERC tells govt

A day after the Delhi government shot off a letter to Delhi Electricity Regulatory Commission questioning last week’s PPAC order, the power watchdog said it’s examining the letter and would reply to it within a fortnight. The Commission also said the power purchase adjustment cost surcharge given to the distribution companies was not a tariff hike, and they are merely following the orders of the Appellate Tribunal of Electricity.

“In 2011, APTEL had given directions to all state electricity commissions to put the PPAC mechanism in place. We are only following their directions. APTEL had given us three weeks to pass the PPAC order. This does not require a public hearing which is the formula followed only for tariff orders. The government is assuming this was a tariff order, when it’s not,” said a DERC source.

On the government’s demand that DERC should have waited for the CAG audit to be completed, the regulator said it slowed the process hoping the CAG results would be declared soon. “But we also have to consider the interests of the power sector. Discoms were actually entitled to more PPAC, but a minimal amount was given to them. We hope the CAG results will be declared and the balance will be taken care of. The impact on funds after the audit results come out will be taken care of in tariff. This is an annual exercise,” said the DERC source.

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