GERC Proposes Quarterly FPPAS Mechanism To Simplify Power Cost Recovery For FY 2026–27 In Gujarat

The Gujarat Electricity Regulatory Commission has started a suo motu petition to review how the Fuel and Power Purchase Adjustment Surcharge (FPPAS) will be calculated and recovered for the financial year 2026–27. This move comes under the provisions of the Electricity Act, 2003, which allows electricity tariffs to be adjusted when there are changes in fuel prices or power purchase costs.

FPPAS is an extra charge added to electricity bills when the cost of generating or purchasing power increases. These changes can happen due to fluctuations in fuel prices, higher power procurement costs, or increased transmission charges. As per current rules, the surcharge is calculated every month and added to consumer bills after a gap of two months. There is also a yearly adjustment process, known as a true-up, to balance any excess or short recovery.

However, power utilities like Gujarat Urja Vikas Nigam Limited and other distribution companies have raised concerns about the current system. They have pointed out that important data, such as transmission losses and energy accounts, is often received late. This leaves limited time for proper calculation, checking, and certification. The requirement to submit detailed documents and get them certified by Chartered Accountants within a short period makes the process difficult to manage.

Another concern is related to billing practices. While FPPAS is calculated every month, many consumers, especially in residential and small commercial categories, receive electricity bills every two months. This mismatch creates confusion among consumers, as they may find it difficult to understand how the surcharge is applied.

To address these issues, GUVNL has proposed shifting the system from monthly to quarterly calculations. Taking this suggestion into account, the Commission has proposed relaxing the existing rules for 2026–27. Under the new proposal, FPPAS will be calculated every three months instead of every month. For example, the surcharge for electricity used between April and June would be calculated in July and then recovered in the following quarter.

This change is expected to make the process simpler and more practical. It will give distribution companies more time to gather and verify data, reducing errors and administrative pressure. At the same time, it may help consumers better understand their bills, as the surcharge will be applied in a more structured manner.

The Commission has also recognized the need to simplify the reporting formats used in FPPAS calculations. Distribution companies have requested that only essential formats be retained to reduce complexity. In response, the Commission has asked stakeholders to share their views on whether the current formats should be revised.

As part of the process, the Commission has invited public comments and suggestions by 15 May 2026. A public hearing on the matter is scheduled for 19 May 2026 at its office in Gandhinagar. The final decision will consider feedback from all stakeholders, aiming to create a system that is both efficient for utilities and clear for consumers.