Delhi has transitioned to a monthly Power Purchase Adjustment Charge (PPAC) system effective April 2026, marking a significant shift from the previous quarterly recovery mechanism. According to NDTV, this represents the first time Delhi has moved from quarterly to monthly PPAC adjustments, with the new system allowing faster reflection of electricity cost changes in consumer bills. The Delhi Electricity Regulatory Commission (DERC) approved partial PPAC rates for April 2026, with TPDDL (North & West Delhi) at 16%, BRPL at 17.94%, and BYPL at 17.43%. The current order applies only to April 2026 costs and is valid for one month, with future changes depending on monthly cost variations. This structural change makes power bills more responsive and potentially more dynamic going forward, as fluctuations in electricity purchase costs will now reflect faster in consumer bills rather than being accumulated over three months. Under the newly introduced Regulation 'F', any unrecovered amount from a particular month can be recovered gradually through subsequent months' bills.
The DERC has permitted the city's three power distribution companies - BSES Rajdhani Power Limited (BRPL), BSES Yamuna Power Limited (BYPL) and Tata Power Delhi Distribution Limited (TPDDL) - to recover FPPA for April 2026. As reported by Mint, the actual power purchase cost in April increased significantly compared to the approved base power purchase cost considered in the prevailing tariff order of September 30, 2021. The FPPAS for April stood at 31.5 per cent for BRPL, 35.26 per cent for BYPL, and 16 per cent for TPDDL. However, the approved hikes were lower than what the distribution companies had sought, with BYPL requesting 35.26%, BRPL seeking 31.55%, and TPDDL proposing around 16%. The Power Purchase Adjustment Cost mechanism allows distributors to recover fluctuating costs of buying power from generating plants, with this surcharge reaching record levels in 2026 and significantly inflating bills. The enhanced surcharge is expected to take effect in upcoming billing cycles, with consumers receiving subsidies for consumption up to 200 units likely to see limited impact while those with higher usage patterns will likely face increased monthly bills.
The Commission allowed a relaxation in the 10 per cent FPPAS recovery limit to remove difficulties faced by discoms in recovering reasonable power purchase cost increases. According to PTI reports cited by Mint, BRPL and BYPL were permitted to recover an additional 7.94 per cent and 7.43 per cent FPPAS respectively for April. TPDDL was allowed to recover the entire 16 per cent FPPAS. Following this relaxation, the total FPPAS permitted to be recovered increased to 17.94 per cent for BRPL and 17.43 per cent for BYPL for the month of April. The regulator has now approved additional FPPAS for TPDDL as well, allowing 8.50 per cent FPPAS over the 10 per cent limit, though its overall surcharge has been capped at 16 per cent instead of 18.5 per cent. The DERC stated that the decision was taken due to a sharp rise in electricity purchase costs in April 2026, following requests for relief from distribution companies. The order will come into effect immediately and will remain applicable on a month-to-month basis until further notice.
The price hike will primarily affect consumers not covered by subsidy schemes, while those receiving subsidies remain unaffected. As reported by Mint, households consuming up to 200 units a month can avail full subsidy with zero effective electricity bill. For households consuming 201-400 units a month, there is a 50 per cent subsidy capped at ₹800. Beyond this consumption level, subsidies are not applicable and customers are billed at full rates. According to NDTV, 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, with consumers under the Delhi government subsidy scheme, especially those using 0-200 units and 200-400 units, being unlikely to be affected. For higher-consumption households outside the subsidy net, bills may see a small increase, with the enhanced surcharge expected to take effect in upcoming billing cycles. The subsidy is based on electricity consumption units, not the final bill amount, providing protection for most subsidized consumers. However, households consuming more than 500 units of electricity a month could see higher bills depending on their usage and applicable surcharge. The revised charges came into effect on June 10 and will be reflected in electricity bills issued in July 2026.
The Chamber of Trade and Industry (CTI) has strongly opposed the PPAC increase and written to Chief Minister Rekha Gupta seeking intervention. In a letter dated June 13, CTI Chairman Brijesh Goyal argued that commercial establishments and industrial units do not receive any subsidy support, making them vulnerable to the additional financial burden. According to CTI, higher electricity costs are making Delhi less competitive for business and manufacturing activities. For commercial consumers with loads above 3 kVA, Delhi charges ₹8.50 per kVAh plus a fixed charge of ₹250 per kVA per month, resulting in an average monthly bill of around ₹47,500. In comparison, Haryana offers tariffs around ₹6.95 per kVAh with a fixed charge of ₹290 per kVA per month, resulting in an estimated monthly bill of ₹38,000. CTI claims Delhi's commercial electricity is now 20-25 per cent more expensive than Haryana. For large industrial units, Delhi's tariff is ₹7.75 per kVAh with a fixed charge of ₹250 per kVA per month, resulting in an estimated monthly bill of around ₹18 lakh. The trade body has urged the Delhi government to review the PPAC increase and take immediate steps to protect business competitiveness.
