PPAC, or Power Purchase Adjustment Cost, is a surcharge applied by electricity distributors (Discoms) to recover fluctuating fuel costs like coal and gas used to generate power. It’s calculated as a percentage on top of your fixed and unit energy charges. This ensures Discoms remain financially stable during market price swings.
DERC sanctioned the following PPAC rates for Delhi’s primary power suppliers for May–June 2025:
- BRPL: 7.25%
- BYPL: 8.11%
- TPDDL: 10.47%
- NDMC Areas: ~50.86%
This percentage is applied to both fixed and energy charges. Even if you consumed the same number of units, your bill would still increase due to the PPAC add-on.
How Much More Are You Paying?
According to the revised figures, the tariff hike translates into a 7–10% increase in monthly bills for most consumers. However, those in NDMC zones face nearly a 50% surcharge—massively inflating their bills.
Example: A household paying ₹2,000 may now pay an extra ₹140–200. For NDMC residents, the total jump could go up by ₹700–₹1000 or more, depending on consumption.
Why Did This Happen?
Three primary factors explain this hike:
- Soaring Fuel Prices: International spikes in coal and gas prices during late FY 2024–25 pushed procurement costs higher.
- DERC’s Pass-Through Policy: DERC allowed Discoms to recover increased expenses through PPAC instead of waiting for annual tariff revisions.
- Low Public Awareness: The PPAC was approved in virtual hearings, with limited publicity and poor consumer participation, sparking transparency concerns.
Public Backlash & Legal Outcry
Several residents, RWAs, and trade associations expressed strong discontent:
- United Residents of Delhi (URD) called the hike arbitrary and raised concerns over the lack of transparent hearings.
- East and North Delhi RWA leaders found the uneven surcharges across zones unjustified.
- Trader associations warned that commercial electricity bills increasing up to 50% could threaten business viability.
Many demanded that PPAC be levied only on energy charges and not on fixed charges. They also called for refunds for outage periods not accounted in bills.
Discoms & Regulator Defend The Decision
According to DERC and Discoms:
- The hike followed due regulatory process.
- PPAC helps ensure timely payments to power generators and keeps Discoms solvent.
- Any excess or deficit in cost recovery will be adjusted via the annual "true-up" process.
Despite assurances, skepticism remains among many Delhiites about the fairness of this revision.
Slab Rates, Subsidy & Final Impact — What You Should Know
Delhi uses a slab-based tariff system with subsidies on lower usage:
- 0–200 units: Free (100% subsidy)
- 201–400 units: 50% subsidy up to ₹800
- 401+ units: No subsidy
However, PPAC is applied on top of these charges. So, even subsidized or zero-unit bills include this surcharge.
Example: A user consuming 350 units in NDMC with a ₹1,500 base bill could now pay around ₹2,400–2,500 after PPAC and tax—surprising many residents.
Who Bears the Brunt?
| Consumer Type | Impact Level | Notes |
|---|---|---|
| NDMC area households | Very High | ~50.86% PPAC + 5% tax = extremely high bills |
| BRPL/BYPL/TPDDL users | Medium | 7–10% hike, relatively manageable |
| Commercial users | Severe | Bills up 40–50%, raising livelihood concerns |
What You Can Do as a Consumer
- Check your bill for PPAC, tax, and unit readings.
- Raise formal objections with DERC or use their consultation platforms.
- Coordinate with RWAs or trader bodies to petition authorities.
- Keep track of true-up orders which may lead to refunds.
- Practice energy conservation to reduce PPAC impact.
The Bigger Picture
- DERC’s Mandate: Balancing consumer interests and financial health of Discoms is crucial.
- Transparency: Public backlash suggests reforms are needed in policy communication.
- Cost of Living: An invisible 7–10% hike is a silent burden on already stretched households.
Frequently Asked Questions (FAQs)
1. Why have Delhi electricity bills increased recently?
The increase is due to a hike in Power Purchase Adjustment Cost (PPAC) approved by DERC to help Discoms recover rising power procurement costs.
2. What is PPAC in the electricity bill?
PPAC is a surcharge added to compensate for fluctuations in electricity generation costs. It’s applied on both fixed and energy charges.
3. Which areas in Delhi are most affected by the power bill hike?
NDMC areas are the worst hit with nearly 50.86% surcharge. BRPL, BYPL, and TPDDL zones see a 7–10% increase.
4. How can I check if the PPAC has been applied to my bill?
Look under the surcharge section in your power bill for a PPAC percentage and the corresponding amount charged.
5. Is the electricity subsidy still applicable in Delhi?
Yes. Subsidy continues as before, but PPAC is applied on top, even on subsidized bills.
6. Can this PPAC surcharge be reversed or reduced?
PPAC is revised quarterly. Formal objections can be raised, and true-up adjustments may result in refunds.
7. Are commercial power users also affected by the PPAC hike?
Yes. Many traders report a 30–50% spike in bills, which is leading to demands for urgent relief.
8. How often is PPAC revised in Delhi?
PPAC is generally reviewed every quarter, depending on power procurement cost changes.
9. Can I save on my electricity bill despite the surcharge?
Yes. Use energy-efficient appliances, cut standby power use, and monitor daytime usage to lower your bill.
10. Where can I raise complaints about incorrect billing or surcharge?
You can contact your Discom’s customer care, email DERC, or use the Delhi Electricity Grievance Redressal Forum (DGRF).
In Summation
This summer’s sudden bill surge wasn’t accidental—it was driven by a legally approved but quietly implemented PPAC hike. While Discoms defend it as a financial necessity, public frustration points to a deeper need for transparency and fairness in electricity pricing.
Final Takeaway
Stay alert. Carefully examine your bills. If something feels off, use formal channels to question it. Consumers deserve clarity—not surprise surcharges.
Report by Toofan Express