- Delhi will shift to monthly Power Purchase Adjustment Charge (PPAC) recovery from April 2026
- PPAC allows discoms to recover changes in power purchase costs due to fuel price fluctuations
- DERC approved partial PPAC rates: BRPL 17.94%, BYPL 17.43%, TPDDL 16% for April 2026
Some electricity consumers in Delhi could see a rise in their power bills from June after the Delhi Electricity Regulatory Commission (DERC) allowed power distribution companies to recover a monthly Power Purchase Adjustment Charge (PPAC) for April 2026.
The move marks a major shift in Delhi's electricity billing system. Until now, such adjustments were calculated and recovered once every three months. From April 2026, they will be reviewed every month.
However, consumers covered under the Delhi government's electricity subsidy scheme are unlikely to see any impact on their bills.
"PPAC is not a new mechanism. Under India's electricity laws, distribution companies are allowed to adjust for changes in fuel costs used for power generation, which keep fluctuating over time. In the past few months, fuel costs have risen due to geopolitical tensions in West Asia, which has led to higher power purchase costs", Delhi Power Minister Ashish Sood said.
What Has Changed In Delhi's Power Billing System?
For the first time, Delhi will now follow a monthly PPAC recovery system instead of a quarterly one.
This means fluctuations in electricity purchase costs will now reflect faster in consumer bills rather than being accumulated over three months.
What Exactly Is PPAC?
PPAC (Power Purchase Adjustment Charge) is an additional charge that allows discoms to recover changes in the cost of purchasing electricity.
Discoms buy power from generating companies and supply it to households and businesses. When fuel costs like coal and transportation rise, electricity procurement becomes costlier.
PPAC allows these additional costs to be passed through to consumers.
Such mechanisms already exist in more than 25 states and Union Territories under electricity sector regulations.
Why Has DERC Allowed It Now?
DERC said the cost of electricity purchased by Delhi's discoms in April 2026 was significantly higher than the approved benchmark.
Officials say that without timely recovery, discoms may face cash-flow pressure and may have to borrow funds to pay generators, which can eventually increase consumer burden.
They also pointed out that central power utilities are allowed monthly cost recovery, while Delhi earlier followed a quarterly system.
How Much PPAC Has Been Approved?
DERC has approved the following PPAC rates for April 2026:
BRPL (South Delhi): 17.94%
BYPL (East Delhi): 17.43%
TPDDL (North & West Delhi): 16%
What companies asked vs what they got:
BRPL sought 31.55%
BYPL sought 35.26%
TPDDL sought around 16%
DERC allowed only partial recovery for BRPL and BYPL.
Even after approval, a gap remains between demand and approval:
BRPL: 13.61% still unrecovered
BYPL: 17.83% still unrecovered
Will Your Electricity Bill Increase?
Not necessarily.
Consumers under the Delhi government subsidy scheme, especially those using 0-200 units and 200-400 units, are unlikely to be affected.
The subsidy is based on electricity consumption units, not the final bill amount.
However, higher-consumption households outside the subsidy net may see a small increase.
If Your Bill Was This, Your New Bill Could Be This
BRPL Area (South Delhi)
Rs 2,775 for 200 units → Rs 2,798 (↑ ₹23)
Rs 6,843 for 400 units → Rs 6,899 (↑ ₹56)
Rs 12,531 for 600 units → Rs 12,633 (↑ ₹102)
BYPL Area (East Delhi)
Rs 2,775 for 200 units → Rs 2,813 (↑ ₹38)
Rs 6,843 for 400 units → Rs 6,935 (↑ ₹92)
Rs 12,531 for 600 units → Rs 12,701 (↑ ₹170)
TPDDL Area (North & West Delhi)
The impact is expected to be negligible as the approved PPAC (16%) is almost identical to the earlier level of 15.99%.
Most consumers are unlikely to see any meaningful change.
Why Is This Shift Significant?
This is the first time Delhi has moved from quarterly to monthly PPAC adjustments.
Earlier, changes in fuel and power purchase costs were passed on every three months. Now, they will be updated every month.
The current order applies only to April 2026 costs and is valid for one month, with future changes depending on monthly cost variations.
What Is The 'Component F' Rule?
DERC has introduced a new mechanism called Component F.
It allows discoms to carry forward any unrecovered amount when regulatory caps prevent full cost recovery.
This pending amount can be recovered later when there is room within the ceiling limits.
The mechanism will apply from July 2026 onwards, starting from zero.
Why Are Experts Raising Concerns?
Some experts have raised concerns over allowing recovery beyond the existing 10% ceiling on adjustment charges.
They have also flagged issues related to regulatory assets and the absence of a detailed audit review before approval.
According to them, such costs may eventually increase the long-term burden on consumers.
The Bottom Line
For most subsidised consumers in Delhi, electricity bills are unlikely to change.
For higher-usage consumers outside the subsidy net, bills may see a small increase.
The key shift is structural: Delhi has now moved to a monthly electricity cost adjustment system, making power bills more responsive, and potentially more dynamic, going forward.
