In a significant move aimed at streamlining power cost recovery and enhancing billing transparency, the Delhi Electricity Regulatory Commission (DERC) has issued a draft notification introducing the Delhi Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) (Second Amendment) Regulations, 2025.The notification, empowers power distribution companies (Discoms) in Delhi to automatically recover changes in fuel and power purchase costs on a monthly basis from consumers through a mechanism called the Fuel and Power Purchase Adjustment Surcharge (FPPAS).
🔑 Key Highlights of the Amendment:
📌 1. Monthly Automatic Billing of FPPAS
- Discoms can now compute and bill FPPAS monthly without seeking prior regulatory approval.
- This is subject to annual true-up by the Commission to reconcile actual costs and collections.
📌 2. What is FPPAS?
- FPPAS covers changes in:
- Fuel cost
- Power purchase cost
- Inter/intra-state transmission charges
- This adjustment is over and above the base tariff approved by the DERC.
📌 3. Timeline for Billing
- FPPAS is billed in the (n+2)th month, where “n” is the month of power consumption.
- Example: Costs from April are billed in June.
- February costs are billed in April of the next financial year.
📌 4. Penalty for Delay
- Positive FPPAS (extra cost for consumers):
If Discoms fail to bill FPPAS on time, they forfeit the right to recover it later, even during true-up, unless due to force majeure. - Negative FPPAS (benefit to consumers):
If not billed timely, Discoms must return the excess during true-up with penalty interest at 1.2 times the carrying cost rate.
📌 5. Capped Recovery Rate
- FPPAS is capped at 10% of total energy and fixed charges.
- Any unrecovered amount due to the cap can be carried forward for adjustment in future months of the same financial year.
📌 6. Mandatory Transparency and Audits
- Discoms must:
- Submit monthly FPPAS calculations to the Commission.
- Furnish quarterly auditor’s certificates with detailed cost breakup.
- Publish all FPPAS data online on a dedicated web address for public access.
📌 7. Unified Billing System
- Discoms are required to update their billing systems to:
- Implement a unified billing platform
- Ensure interoperability across different vendors
- Possibly use open-source software for standardization.
📌 8. Exclusions from FPPAS
- Charges related to:
- Deviation Settlement Mechanism (DSM)
- Ancillary Services
- Security Constrained Economic Dispatch (SCED)
will not be included in FPPAS but will be handled during annual true-up.
📉 Regulations Deleted
- The DERC has also deleted Regulation 135 and 136 of the principal regulations, simplifying the framework around power cost adjustments.
📌 Conclusion:
This amendment marks a significant shift toward automation, transparency, and efficiency in Delhi’s power sector. With real-time adjustments, capped surcharges, and strict timelines, consumers can expect more accurate bills, while Discoms gain flexibility in recovering variable power costs.
The DERC’s move reflects a broader trend of digital transformation and accountability in utility regulation, aligning with national energy reforms