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Fuel Adjustment Charges on Electricity Bills explained

By on January 22, 2014

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.

Coal

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.



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18 Comments on "Fuel Adjustment Charges on Electricity Bills explained"

If you have any question or comment, please leave a message here. We try to reply to questions in the sequence they come in. We work from Monday-Friday 10AM-7PM. If we know the answer we try to reply to the question within 3 days.

Guest
sanjeev kumar
April 28, 2015

Sir Sanjeev here, I have one 1.5ton window ac 5 star and one split ac 1.5ton 3 star, one geyser which works in winter a 360 litre refrigerator 4 star rated, 4cfls and three fans what load should i apply in uttar pradesh, two acs will not work together always. all fans never work together, also i have a sukam inverter, please suggest me

Guest
sanjeev
June 2, 2015

But geysers dont work in summer and ac’s dont work in winter

Guest
saurav suman
February 21, 2015

HI sir, I have to take a new electricity connection for my new house with these appliances 5 cfls(8hrs/day),3 fans,1 submersible pump(1hp),1 freeze, 2coolers(only in summer), 1 inverter, 1 t.v, 1 geezer(in winter), 1 washing m/c.so, plz suggest me that 2 kva is sufficient for the new connection or not.

Guest
Ashwani
February 10, 2015

DERC Supply Code and Performance Standards Regulations, 2007, ANNEXE XIII, Assessment of energy in cases of theft/pilferage on Page 124 of the subject code / regulations has following insertion;

Quote
The working hours for the purpose of assessment in the cases of bonafide domestic use for operating domestic water pump, microwave owens, washing machines and petty domestic appliances shall not be considered for more than one hour working per day on 100% load factor.
Unquote

In this regard, kindly clarify how the Geyser is to be treated for assessment? Is it to be treated as a petty domestic appliance and not be considered for more than one hour working per day on 100% load factor?

Is there any DERC ruling / clarification/ case in this regard? Kindly provide the same in case available. I understand that Staff Paper on Delhi Electricity Supply Code & Performance Standards Regulations has proposed Geyser as petty domestic appliance, but this never got implemented.

Guest
suneet
August 17, 2014

dear mr abhishek, my FPPPA charges for august 2014, in gandhinagar gujarat(torrent power) is 1763rs. Please explain it. Please add an option for attaching bill here (instead of mailing it) so communication can be improved.

Guest
suneet
August 20, 2014

Hi I have sent bill on your link.

Guest
Jigar Mistry
January 28, 2014

Dear Mr. Abhishek,

Would like to know what is Total Adjustment Amount which is mentioned in the electricity bill and in details it is just mentioned a three digit no. Kindly explain?

Regards,
Jigar Mistry

Guest
Abhishek Jain
January 30, 2014

Hi Mr Jigar,

Total Adjustment would be the sum of various kinds of adjustments on your bill. This would include fuel adjustment charges, any discounts or arrears, etc. If you can send me a copy of your electricity bill at [email protected], I can reply to you in greater detail.

Regards,
Abhishek

Guest
Nilesh
April 3, 2013

dear sir/ma’am

Which elements are used while generating electricity?
&
On which bases they decide cost for Below poverty line consumer?

Guest
Abhishek Jain
April 4, 2013

Hello,

It’s a mix of sources that are used to generate electricity. Mostly it is coal that is used. These days lot of renewables sources are also being used. Some states have hydro or geothermal energy generation. So it is a mix in every state in the country. As far as definition of BPL is concerned, it is mostly the standard definition provided by the government. For the basis I think someone from state’s electricity regulatory commission can provide the best answer, because they are the ones who give final approval for tariffs.

Regards,
Abhishek

Guest
anitha
November 17, 2012

Dear team

my electricity bill shows fac of nil for july and aug 2012… Does this mean there were no changes in fuel prices??? It shud hv atleast been negative if not positive… Am i being cheated?

Guest
Abhishek Jain
November 17, 2012

HI Anitha,

Most state tariffs got revised in July and August timeframe. Many states had accounted for latest fuel prices in their new tariffs and thus nil FAC sounds reasonable. It is not always necessary that FAC is negative or positive. If the tariffs are at parity with generation cost, then FAC is not used. So I do not think there is any problem with nil FAC.

Regards,
Abhishek

 
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