Electricity bills for all categories of consumers (except agriculture) in Gujarat are expected to rise because Gujarat Urja Vikas Nigam Limited (GUVNL) has decided to increase fuel surcharge by 10 paise on each unit of power consumed.
The spike in electricity costs will be applicable from October 1, 2021. GUVNL which has been buying expensive electricity from the power exchanges ( as high as Rs 15-17 per unit) to tide over the shortage of power, has worked out an increase in Fuel and Power Purchase Price Adjustment Charges (FPPPA) to the tune of 50 paise per unit for the second quarter (July-September) 2021-22.
However, as GUVNL requires the approval of the Gujarat Electricity Regulatory Authority (GERC) for increasing fuel surcharge or FPPPA beyond 10 paise per unit, it has decided to charge FPPPA at Rs 2 per unit (Rs 1.9 + 0.1) for the period from October 1, 2021.
“Since increase in FPPPA for second quarter of financial year 2021-22 is 50 paise per unit, which is in excess of 10 paise per unit, approval of Honorable Commission (GERC) has been sought for recovery of balance FPPPA of 40 paise per unit,” GUVNL stated in an order to all the four power distribution companies which includes Uttar Gujarat Vij Company Limited (UGVCL), Paschim Gujarat Vij Company Limited (PGVCL), Madhya Gujarat Vij Company Ltd (MGVCL) and Dakshin Gujarat Vij Company Ltd (DGVCL).
FPPPA charges in Gujarat is set to increase as GUVNL engages in buying expensive power in October.
Currently, consumers who are paying a fuel surcharge of Rs 1.9 per unit, will now have to pay Rs 2 per unit of power consumed.
If GERC approves the demand for another 40 paise increase in FPPPA charges, then the surcharge will go up to Rs 2.4 per unit.
According to energy expert KK Bajaj, the power purchase cost of GUVNL which was Rs 4.56 per unit in first quarter (April-June) of the current financial year, has jumped up by 43 paise to Rs 4.99 per unit. When seven paise is added as transmission and distribution loss for 2021-22, the rise in power purchase cost jumps to 50 paise per unit.
“GUVNL has faltered in purchasing expensive power from the power exchanges this year. The burden now falls on the consumers. The Plant Load Factor (PLF) of state-run lignite power plants remains at just 10 per cent, while thermal power plants are operating at 30 per cent of their capacity,” he said while explaining the reasons why Gujarat was forced to buy power from exchanges and at higher rates from private players.
Bajaj also pointed out that if FPPPA charges climb to Rs 2.4 per unit, then it will be 79 per cent of the tariff (Rs 3.05 per unit) that a residential consumer pays for the first 50 units.
“GERC has put a ceiling of FPPPA charges at Rs 2.1 per unit. It remains to be seen, if the regulatory authority permits recovery that goes beyond this ceiling rate,” he added.
This increase in fuel surcharge will not be applicable to agricultural consumers or farmers as the state government heavily subsidises the power consumed by this segment.
