BHOPAL: Electricity consumers in Madhya Pradesh will experience a slight relief in their monthly expenses for the billing cycle from June 24 to July 23. The distribution companies (discoms) have announced a minor reduction in power tariffs, amounting to nearly 3% compared to the previous month. This adjustment is attributed to the Fuel and Power Purchase Adjustment Surcharge (FPPAS), which will see an increase of only 1.03% for this cycle.
Last month’s FPPAS saw a significant hike of 3.9% over and above the base tariff sanctioned for the year by the Madhya Pradesh Electricity Regulatory Commission (MPERC). This effectively means that, when comparing the current cycle with the previous billing period from May 24 to June 23, consumers will benefit from a decrease in the power tariff by approximately 3%. The implementation of FPPAS on a monthly basis follows a recent amendment by the MPERC. This amendment permits discoms to adjust tariffs monthly, based on variations in the actual power purchase cost and the estimated power purchase cost for a given month. The current FPPAS for the cycle of June 24 to July 23 is calculated based on the cost differences from April this year. According to the amendment to the MPERC Regulations 2021, the regulator now allows for the FPPAS to be “calculated and billed by the distribution licensee to consumers, automatically, without going through the regulatory approval process, on a monthly basis.” This new regulatory framework aims to provide a more responsive and transparent mechanism for adjusting electricity tariffs in line with actual costs.
Typically, power tariffs are determined by the regulator based on the estimated cost of energy production for the financial year. Any discrepancies between estimated and actual costs at the end of the fiscal year were traditionally addressed through ‘true up petitions’ submitted by the discoms. However, under the new regulations, the difference in the estimated and actual fuel costs for production in a specific month can now be directly passed on to consumers in the following month. This regulatory change has streamlined the process, ensuring that consumers are charged more accurately based on the real-time cost of power production. For the current billing cycle, this has resulted in a favourable adjustment for consumers, who will see a reduction in their electricity bills. The ongoing adjustments and the transparent approach adopted by the MPERC highlight the efforts to balance the interests of consumers and the financial health of the discoms. By aligning the tariffs more closely with actual costs, the new system aims to provide a fairer and more predictable pricing model for electricity consumers in the state. As the state continues to navigate the complexities of power production costs and consumer tariffs, such regulatory measures play a crucial role in maintaining stability and ensuring equitable treatment for all stakeholders involved.
