I am sure not everyone has heard of what is PPAC in electricity bill. It is not a very common term used by people every day. But people like me, who are a part of this sector, know what it actually means. I can help you out with understanding it.
PPAC meaning in electricity bill
The full form of PPAC is Power Purchase Adjustment Cost. As you can make out, PPAC is a component of our electricity bill. DISCOMs use PPAC to make an account of all the fluctuations in the cost that occur during the procurement of power. These fluctuations can occur due to changes in regulatory policies, fuel prices, generation mix or many other such factors.
Let me explain this to you in more detail.
Cost fluctuations: As I already said the fluctuations in the cost can happen due to changes in the fuel prices, changes in the generation of renewable energy or because of the unforeseen maintenance of power plants.
Adjustment mechanism: PPAC has also been introduced as an adjustment mechanism to make sure that the cost that is incurred by the DISCOMs for procuring the power is covered adequately to ensure that any large variations in the tariff are also covered.
Calculation: The real or actual variations in the cost of procuring power are calculated on the basis of PPAC.
Transparency: Since the calculation is done on the basis of PPAC it also brings about transparency in the cost of procuring power and generating power.
Consumer awareness: If consumers understand the concept of PPAC and how important it is for calculating the power bill, consumers can understand that whenever they see changes in their power bill it is not just because of the way they use power but also because of other factors like the generation or procurement of power.
Now you know what is PPAC in electricity bill.
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What is PPAC in Electricity Bill?
Bidisha
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2023-08-22T19:09:10+00:00 2023-08-30T16:48:58+00:00Comment
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