HERC Considers INR 938.86 Crore FPPAS Recovery Deferral By Haryana Discoms

The Haryana Electricity Regulatory Commission (HERC) has considered petitions filed by Uttar Haryana Bijli Vitran Nigam Limited (UHBVNL) and Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL) seeking relaxation in the timeline for recovery of Fuel and Power Purchase Adjustment Surcharge (FPPAS) for the financial year 2025–26.

In their petitions, the distribution companies requested permission to defer recovery of FPPAS beyond the mandatory $(n+2)$th month under the Haryana Electricity Regulatory Commission (MYT) Framework Regulations, 2024. They also sought permission to recover the deferred amount in subsequent financial years on a uniform per-unit basis across consumer categories, along with carrying costs on the deferred amount. The DISCOMs said the approach would help prevent a sudden tariff impact on consumers.

According to the petitions, the total FPPAS liability for FY 2025–26 was calculated at Rs 938.86 crore, equivalent to 2.17% of the approved tariff. The DISCOMs said FPPAS remained negative at -0.07% during the first half of the financial year and was 2.01% in October 2025. However, it increased sharply to 40.34% in November 2025.

The companies attributed the sharp increase mainly to non-recurring prior-period charges of Rs 589.19 crore and Rs 464.26 crore in surcharge adjustments related to M/s GMR Kamalanga Energy Ltd. The latter payment was made pursuant to a Supreme Court judgment dated September 8, 2025. The DISCOMs argued that recovering these costs through the regular monthly mechanism would result in a significant burden on consumers in a single month.

Several public representatives and consumer advocates participated in the proceedings and raised objections. Intervenors including Sh. Umed Singh, Sh. K.C. Sharma and Sh. Sampat Singh questioned aspects of transparency, operational efficiency, accumulated losses and the possibility of double recovery.

Sh. Sampat Singh argued that the petitions were not maintainable under Regulations 81, 82 and 84, which govern the FPPAS mechanism. He submitted that failure to comply with the prescribed recovery timelines should affect the DISCOMs’ recovery rights. He also argued that a Supreme Court judgment should not be treated as an administrative difficulty under Regulation 84.

The intervenors further referred to HERC’s June 10, 2025 order concerning FY 2024–25, in which carrying costs for delayed FPPAS recovery had been denied. Questions were also raised regarding a separate payment of around Rs 1,300 crore to Sikkim Urja Limited and the need for greater dependence on long-term power purchase agreements and renewable energy to reduce short-term procurement costs.

The DISCOMs maintained that FPPAS covers legitimate and uncontrollable changes in fuel and power procurement costs and is separate from base tariffs and operational inefficiencies. They said deferring recovery would protect consumers from an immediate tariff shock while allowing the costs to remain subject to regulatory scrutiny through annual true-up proceedings.

HERC observed that FPPAS is a statutory pass-through mechanism intended to maintain the financial viability of distribution licensees without changing base tariffs. The Commission also noted that previous deferrals without carrying costs had placed considerable financial pressure on the utilities.