‘Shock’ every month! Companies soon to decide on power tariff

New Delhi: Soon, consumers may find their electricity bills increasing every month if the Central Government goes ahead with the proposed the Electricity (Amendment) Bill, 2022. The Centre has already sought the opinion of the states on the ‘Draft Amendments to Electricity Rules 2005’.

As per the amendment, the power distribution companies can hike the tariff every month based on the change in fuel cost, power purchase cost, and transmission charges. A formula to calculate the additional charges to be levied has been prescribed. The companies don’t require the nod of the regulatory commissions to effect the tariff hike.

Why the change?
Most of the power distribution companies in the country face a financial crisis.

The move is aimed at relieving the burden of the firms in meeting the increase in the purchase cost of electricity from outside, besides the fuel expenses.

The additional amount will be levied from the consumers under the head Fuel and Power Purchase Adjustment Surcharge (FPPAS).

Can delay power tariff hike up to two months
The regulatory commission should clarify the method used to calculate the electricity charges (formula) within three months of the amendment coming into force.

Till then, the tariff should be arrived at using the method prescribed by the Centre.

For instance, the power distribution companies can include the additional fuel expenses, distribution, and power purchase charges relating to April in the June bill.

The companies can delay levying of the FPPAS by up to two months, if necessary, to avoid a heavy burden on the consumers.

They can do this only if the additional charges form more than 20 % of the total tariff. However, the firms can’t levy the charges outside the stipulated period.