Have you ever wondered why your electricity bill amount is not the same even when you have the same number of units consumed on the bill? Why is it that the electricity bill is different even when you have not changed your electricity consumption? If you look at your bills you will just find that there is an amount mentioned as FAC or FCA or FPPCA, which is either positive or negative and is creating the difference.
What is FAC/FCA or FPPCA?
FAC (Fuel Adjustment Charge) or FCA (Fuel Cost Adjustment) or FPPCA (Fuel and Power Purchase Cost Adjustment) is amount that utilities apply on bills based on varying price of fuel or Coal. The price of coal or fuel changes every month based on demand and supply of coal and thus cost of producing electricity changes accordingly. The electricity generation companies pass on this cost to distribution companies who there by pass it on to consumers.
Why is FAC not included in the tariff slabs?
Electricity regulatory commissions of various states fix tariffs for electricity in India periodically. The revision happens every few years (every year in some cases) and a new tariff is set based on the cost of production and distribution of electricity. But the prices of fuel or coal changes throughout the year and the utilities have to manage these changing costs by passing it to the consumer.
How frequently does FAC change?
It varies from state to state. In some places like Mumbai, FAC is calculated every month. In most of the states it is Quarterly. In Madhya Pradesh it is Half Yearly and in West Bengal it is yearly. In some states like Chhattisgarh and Tripura it is revised on need basis from time to time. In case new tariffs are not defined frequently, the FAC component in electricity bill can be as much as the electricity tariff amount.
How is FAC calculated?
Every state has a different formula to calculate FAC amount. We are in process of collecting this information. We will update the readers of Bijli Bachao as soon as we get this information handy.
How does FAC impact my electricity bill?
It is a charge that is applicable per unit of electricity consumed. Unlike fixed charges it is a variable component on the electricity bill and changes as per your consumption of electricity every month. At times it is negative as well but mostly it is positive. Any reduction in monthly consumption of electricity will surely help in bringing down the amount in this component. So keep reading Bijli Bachao and reduce your electricity consumption.