No hike in power tariff, yet consumers get inflated bills in Assam. Here is the real reason.

For nearly a week, Assam has witnessed massive public outrage over inflated electricity bills. This hike has happened even though the Assam Power Distribution Company Limited (APDCL) has not increased the power tariff recently. In fact, on September 16, Assam Chief Minister Himanta Biswa Sarma clarified that there had been no hike in the power tariff and blamed the increased bills on faulty meters. "There has been no hike in the power tariff. Instances of unreasonable bill amounts have been brought to my notice. I'm told this rise could be because of faulty readings in some of the newly installed smart meters. I have instructed the APDCL to fix the faulty smart meters and address public grievances urgently," Sarma told India Today NE.

The chief minister is partially correct. There has been no hike in power tariff despite rumours that APDCL has upped the charges since August. There could be some faulty meters too. But the electricity bills have gone up because of the changes in Fuel and Power Purchase Cost Adjustment (FPPCA), which has increased by 30 paise. "What CM Sarma has said is correct. But the additional FPPCA charge has been impacting the bills, "says an APDCL official.

The FPPCA is the amount that power companies apply on bills based on the varying prices of fuel and coal. The price of coal and fuel changes every month based on demand and supply. The electricity generation companies pass this change in the cost to the distribution companies, which then pass it on to consumers.

In the electricity bills, the FPPCA amount is separately mentioned as a component while calculating the total billed amount. This FPPCA charge is applicable to every unit of electricity consumed. So, it changes as per the consumer's consumption of electricity every month. Any reduction in the monthly consumption of electricity is likely to bring down this component in the electricity bill. And higher usage increases the FPPCA component in the bill.

In the last three months, the FPPCA charge dipped by five paise per unit, and it was reflected in the power bills. Now, the charge has gone up by 30 paise for the next three months, triggering the increased electricity bills.

The users in Guwahati city consumed an average of 100 million units per month in the past few months, but now it has increased to 125 million units per month. As FPPCA is applied on every unit consumed, this higher usage has led to increased power bills. "That's the reason we have been requesting consumers to reduce usage," says an APDCL official.