DERC Allows Delhi DISCOMs to Recover Additional Power Purchase Costs Beyond 10% FPPAS Cap

The Delhi Electricity Regulatory Commission (DERC) has granted special regulatory relaxation to three power distribution companies in Delhi, allowing them to recover higher power purchase costs for September 2026 beyond the existing 10% Fuel and Power Purchase Adjustment Surcharge (FPPAS) cap. The order, issued on November 10, 2026, applies to BSES Rajdhani Power Limited (BRPL), BSES Yamuna Power Limited (BYPL), and Tata Power Delhi Distribution Limited (TPDDL).

Under the existing regulatory framework, DISCOMs are permitted to recover FPPAS of up to 10% in a single billing cycle. However, the distribution companies approached the commission seeking additional recovery after experiencing a significant increase in electricity procurement costs compared with the baseline approved under the 2021 tariff order.

The DISCOMs initially claimed FPPAS rates of 44.29% for BRPL, 39.26% for BYPL, and 30.42% for TPDDL for September 2026. After examining the submissions and conducting a prudence check, DERC determined the eligible surcharge rates at 40.77%, 36.45%, and 26.60%, respectively.

The commission attributed the increase in power purchase costs to several supply and demand-related challenges. An erratic and deficient monsoon, influenced by the El Niño phenomenon, resulted in unexpectedly high electricity demand across Delhi. At the same time, outages at Central Generating Stations and low coal stock levels at thermal power plants affected the availability of electricity from conventional sources.

These supply constraints forced the distribution companies to arrange additional electricity from more expensive gas-based State Generating Stations to maintain an uninterrupted power supply. Consequently, their overall power procurement expenses increased, creating additional financial pressure on the utilities.

To address the situation, DERC exercised its powers under Regulation 172 of the Tariff Regulations, which allows the commission to relax regulatory provisions to remove implementation difficulties. The commission approved additional FPPAS recovery beyond the standard 10% cap.

Under the order, BRPL can recover an additional surcharge of 7.94%, BYPL 7.43%, and TPDDL 8.50%. The additional recovery will be permitted for one month from the date of issuance of the order.

This is not the first time the commission has provided such relief to Delhi’s distribution companies. Similar regulatory relaxations were previously granted for April, May, and June 2026 to help utilities manage higher electricity procurement expenses.

The latest decision provides temporary financial relief to the three DISCOMs while allowing them to recover a portion of the increased power purchase costs. DERC has clarified that all other provisions of the existing tariff regulations will continue to remain applicable.