The Delhi Electricity Regulatory Commission (DERC) issued an order on December 20, 2024, concerning a petition filed by BSES Yamuna Power Ltd. (BYPL) regarding the levy of Differential Power Purchase Adjustment Cost (PPAC) for power purchase costs incurred during the second quarter of the financial year 2024-25. The petition was filed under Section 62(4) of the Electricity Act, 2003, in conjunction with Regulation 134 of the DERC (Terms and Conditions for Determination of Tariff) Regulations, 2017.
BYPL sought approval to levy a PPAC for power purchase costs incurred between July and September 2024. The petition proposed a differential PPAC rate of 8.35% to 8.82%, calculated using methodologies approved by the DERC and the Ministry of Power (MoP). These rates included a base PPAC of 7.43% from the Annual Revenue Requirement (ARR) for FY 2021-22 and arrears from the Badarpur Thermal Power Station (BTPS).
In its analysis, the DERC scrutinized BYPL’s submission, which included calculations for PPAC at 16.13% and 16.60%, depending on the methodology employed. However, discrepancies were found in BYPL’s computations, particularly concerning short-term power sales and refunds from Short-Term Open Access (STOA). Following a prudence check and verification of submitted data, the Commission adjusted the computed PPAC for Q2 FY 2024-25 from BYPL’s proposed 8.35% to 5.85%.
The DERC acknowledged that BYPL had levied a capped PPAC of 7.78% from November 1, 2024, for three months as per Business Plan Regulations, 2023. However, the Commission determined that for Q2 of FY 2024-25, the recoverable PPAC was 5.85%, significantly lower than BYPL’s claimed rate.
The order allows BYPL to recover the approved PPAC of 5.85% over three months from December 21, 2024, to March 20, 2025. The decision ensures compliance with regulatory frameworks and reflects the DERC’s commitment to balancing the financial sustainability of the distribution company with consumer interests.
The Commission highlighted the variation in claimed and allowed PPAC rates, attributing the differences to unaccounted short-term power sales and STOA refunds. This decision underscores the importance of accurate reporting and compliance in tariff determination processes.
This case demonstrates the regulatory oversight exercised by the DERC in electricity pricing and the mechanisms in place to address variations in power purchase costs. It ensures transparency and fairness while adhering to the principles outlined in the Electricity Act and accompanying regulations.
