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Home News Power Sector News Delhi - From December fuel surcharge on quarterly basis

Delhi - From December fuel surcharge on quarterly basis

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DERCFrom this December, consumers will start taking an active interest in the international price of coal and gas as it is from this period onwards that an extra column on 'fuel surcharge' will be added to your electricity bill.Following Friday's order on the new power tariffs by Delhi Electricity Regulatory Commission (DERC), this amount, which will reflect the variation in global fuel prices, will be charged to consumers on a quarterly basis instead of at the end of the year which has been the practice till date. Whether this will make a marginal or large difference to your already increased bill depends on what price distribution companies get power from generating stations at and the international price of coal and gas.

"By borrowing money to pay power suppliers, it is the consumer who will end up with the burden of having to pay carrying cost (interest) too. To avoid this, we had asked the commission to institute a mechanism for passing the variations in power purchase cost to the consumers on a monthly or quarterly basis,'' said a discom official. Discoms had made a proposal for fuel cost adjustment in their tariff petitions submitted earlier this year. They argued that they have to pay power suppliers, like NTPC or Indraprastha Gas, on a monthly basis and that it took them at least two years to recover their expenses. The Commission ruled in favour of discoms, who have been advocating implementation of this formula for years, by clarifying that it was in the interest of consumers who otherwise would have been burdened with paying carrying costs as well.

Power officials say coal and gas account for up to 80% of power procurement costs. Power procurement costs also increase merchant power costs (power bought on short notice), which again discoms claim is priced depending on the demand-supply scenario. Officials said there have been drastic changes in fuel prices in the past two years, which have taken a toll on their balance sheets.

Source- Times of India


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