As the Gujarat Urja Vikas Nigam Limited (GUVNL) prepares to increase the fuel surcharge by 25 paise per unit for the period of April to June 2023, electricity in the state is expected to become more expensive this month. The Fuel and Power Purchase Price Adjustment Charges (FPPPA), also known as the fuel surcharge, will increase for the second time this year.
The government had put the FPPPA hike on hold ahead of the state election held last year in December. As the BJP returned to power, a 25 paise per unit hike was enforced in January.
With the proposed increase for the April-June 2023 period, the FPPPA charges in Gujarat will increase to Rs 3.1 per unit. This will be added to the electricity bill.
On Monday, Gujarat Electricity Regulatory Commission (GERC) — the state’s electricity regulator— gave a formal nod to the GUVNL to hike the charges.
A formal announcement from the GUVNL is pending and could be made anytime. “This increase will put an additional burden of Rs 7,200 crore on 1.65 crore electricity consumers in the state. For the first time, GERC did not wait for the GUVNL to submit Power Purchase Cost and FPPPA data. This data is usually submitted by GUVNL at the end of April,” said KK Bajaj, a veteran energy expert who represents consumer issues at the GERC.
In the last year, the per unit cost of electricity in the state has risen after FPPPA charges increased by 35 per cent by Rs 2.3 per unit in April 2022. In April 2021, FPPPA charges were as low as Rs 1.8 per unit. The rise in fuel surcharges affects residential, commercial, and industrial consumers in the state.
Since the state government is responsible for paying the subsidy, agricultural consumers are unaffected.
The GUVNL has been steadily raising FPPPA fees as a result of its expensive power purchases, particularly from independent power producers.
The Indian Express previously reported that the government paid private players Rs 20,500 crore for the electricity it bought from them in 2022. This sum was distributed to the Tata, Adani, and Essar Groups for nearly 74% of it.
The cost of electricity bought from Essar Power Gujarat Ltd rose by 225 per cent in 2022, while the cost of power from Adani Power Mundra Ltd and Coastal Gujarat Power Ltd (a 100 per cent subsidiary of Tata Power) rose by 85 per cent and 75 per cent respectively, as per the data tabled in Gujarat Assembly during last month’s budget session.
“GERC has so far never directed GUVNL to reduce power purchase costs by operating its own lignite and coal-based plants at 75 per cent capacity. With power demand crossing 21,000 MW, GUVNL is compelled to buy costly power from private entities and power exchanges to prevent power cuts in the state,” Bajaj added.