Login

April 09

Power rate hike in open market to push PSPCL's purchase bill

Patiala: The sudden rise in the cost of power in the open market seems to have become a cause of concern for the Punjab State Power Corporation Limited (PSPCL) as this might increase its power purchase bill during the current fiscal.

As per the multi-year tariff petition (MYTP), the PSPCL has projected a requirement of 58,299.84 million units to meet state’s power demand the current fiscal year. The power available from state’s own generation is 13,379.71 million units, which includes 5,069.05 milion units from state-owned thermal power plants, 4,515.52 milion units from hydro plants and 3,795.14 milion units from the state’s share from BBMB projects.

The remaining 44,920.13 million units are to be bought from independent power producers (IPPs) that are operating from the state with whom the PSPCL has signed long-term power purchase agreements (PPAs) and sources outside the state. As per its planning, the PSPCL is expecting to spend Rs 18,864.56 crore on power purchase during the current fiscal.

The prevailing price of per unit cost of electricity in the open market has already shot up by around 54% as compared to the month of February. Power is now available at an average rate ranging between Rs 3.38 per unit to Rs 4.7 depending on the peak and non-peak hours. The rates have even gone up to Rs 8 a unit during the peak hours. In February this year the average cost of a unit was Rs 2.56. According to highly placed sources in the PSPCL, the average cost at which PSPCL is likely to buy power has been calculated at Rs 4.5 per unit.

With the shutting down of thermal units at Bathinda and Ropar plants, the PSPCL is now short of 880 units. While, the corporation is maintaining that it has already made arrangements to buy around 1000 MW of power at cheap prices for which agreements have been signed, but any unscheduled purchases made during the peak paddy sowing season to meet increased demand will increase PSPCL’s power purchase bill.

Chairman cum Managing Director of the PSPCL, A Venu Prasad, had recently told the TOI that the power corporation had already signed power purchase agreements with Damodar Valley Corporation from where the state will get 250 MW at Rs 3.9 a unit, the PSPCL will have 200 MWs from the Power Trading Corporation at a rate of Rs 3.50 a unit and 150 MW is being arranged from the Solar Energy Corporation of India. Besides, 250 MWs of power will also be placed at the disposal of PSPCL from the solar plants set up within the state.

However, sources claim that due to reduced generation capacity of 880 MW, the PSPCL will have to make purchases from the open market.

Padamjit Singh, patron of the All India Power Engineer’s Federation (AIPEF) said that going by the predictions made by the Meteorological Department regarding rising summer temperatures this year, the demand can go further up than what the PSPCL has projected. He said the snow covers on hills suggest there will a be fall of around 50% in the flow of waters into the Sutlej, Beas and Ravi rivers systems implying a direct reduction of hydel generation from BBMB as well as PSPCL's own hydro units. He said, given these indications the state will have to buy extra power from the open market which would put an additional financial burden on the already cash-strapped power corporation.

He said even the independent thermal units in the state were having a hard time this year as the Talwandi Sabo thermal plant was operating at two-third of its installed capacity and the Rajpura thermal Plant was constantly facing coal problems. Last year, the Rajpura plant had to be shut down one of its units due to the shortage in its coal stocks. He said, with the further rise in temperatures and shortfall in the availability of power in the open market, the average cost could escalate close to Rs 8 a unit in the coming few months.

Meanwhile, the rise in power cost in the open market will prove to be a boon for independent power producers as soaring summer would mean soaring profits for them.

Back to Top