Will Delhiites Pay More For Electricity After Regulators Latest Move Heres What Minister Said

Amid criticism over the Delhi Electricity Regulatory Commission’s recent nod (DERC) to discoms for raising a surcharge used to recover higher power procurement costs, which is set to increase electricity bills in the Capital, Power Minister Ashish Sood on Saturday said that consumers receiving subsidy would remain unaffected. “I want to categorically state that all consumers receiving Delhi government electricity subsidies will face absolutely no impact on their electricity bills due to this regulatory adjustment,” Sood said.

Citing the impact of the ongoing conflict between the United States and Iran in West Asia, he added, “The electricity laws of the country already permit power companies to adjust for the rising cost of fuel used to generate electricity. Due to the situation in West Asia and other prevailing circumstances, fuel costs have risen sharply, leading to a 31% increase in power procurement costs during the past month.”

The power regulator in the Capital approved an increase in the Power Purchase Adjustment Cost (PPAC) — a regulatory surcharge that allows distribution companies to recover fluctuations in fuel and power procurement costs — charged by power distribution companies on June 10.

Officials, however, underlined that PPAC has no impact on the electricity bills of consumers eligible for subsidy as the subsidy is linked to the number of units consumed and not to the bill amount.

As per the official data, the number of electricity consumers in Delhi stood at around 73 lakh in 2024-25. Of these, 84% or 61 lakh are domestic consumers. Around 80% of the domestic consumers or nearly 48 lakh get subsidies in two categories — free electricity for monthly consumption of up to 200 units and a 50% subsidy for those using 201 to 400 units.

Officials said the regulator allowed lower recoveries than what was sought by the discoms in some cases.

According to the DERC order, PPAC for BSES Rajdhani Power Limited (BRPL) has increased from 14.51% to 17.94%, while for BSES Yamuna Power Limited (BYPL) it has risen from 11.71% to 17.43%. For Tata Power Delhi Distribution Limited (TPDDL), the PPAC hike has been negligible — from 15.99 % to 16%. So, the biggest impact is set to be felt for consumers in East and Central Delhi served by BYPL.

A household getting 400 units of electricity will pay Rs 92 more in areas under BYPL and Rs 56 more in areas under BRPL. The increase is negligible for Tata Power areas. The hike is set to reflect for the bills that are generated from the month of June.

The Minister’s clarification came amid criticism from opposition parties and RWAs. “The Central government has increased the prices of petrol, diesel, cooking gas, everything. So the Delhi government seems to have thought, ‘Why should we be left behind?’ They have increased electricity tariffs as well. Now, it is difficult for the middle class to live in Delhi. School fees are almost doubling, electricity prices have been raised, and houses are being demolished. How can anyone live in Delhi under such circumstances?” asked AAP leader Saurabh Bharadwaj.

BS Vohra, President of the East Delhi RWAs Joint Front, claimed that the regulator had approved the increase without an audit by the Comptroller and Auditor General (CAG) and demanded that the Delhi government intervene and conduct a review of the matter.

Officials underlined that PPAC enables discoms to recover power purchase costs already paid to generating companies and helps avoid liquidity stress in the sector.

According to officials, Delhi shifted to a monthly PPAC mechanism from April this year, replacing the earlier quarterly system. They added that the Ministry of Power and subsequent amendments to electricity rules require state regulators to establish mechanisms for automatic pass-through of fuel and power procurement cost variations. More than 25 states and union territories have implemented a fuel surcharge adjustment formula, officials added.