Justify power purchases from exchanges: APERC

VIJAYAWADA: Observing that the State power distribution companies (discoms) purchased power from power exchanges on a large scale in the past few months, the Andhra Pradesh Electricity Regulatory Commission (APERC) has directed the discoms to ‘justify’ their decision to go for purchases from spot markets. The discoms were asked to furnish the details within a month.

“The discoms have purchased power from exchanges on a large scale in the last few months in deviation from the approved sources in tariff order 2020-21. Therefore, they are directed to place the material to justify their decision by showing the saving achieved or that such purchases have not imposed any additional burden on discoms due to existing binding agreements, within one month,” the commission observed in recent proceedings pertaining to procurement of power from two private generators on a short-term basis. The commission further noted that procurement from exchanges was permitted only during exigencies.

The officials from the Transmission Corporation of Andhra Pradesh (APTRANSCO) and discoms said that they went for purchases from spot markets as power was available at lower costs than the rate approved by the commission even after factoring in the fixed costs to be paid to generators, with which agreements were made.

“We periodically submit the procurement data to the APERC and have already informed that the landed price of purchases from the exchanges for April and May was between Rs  2.55 and Rs  3.07 per unit, which translates to an average of Rs  2.94 per unit. Since, the commission once again asked, we will justify why we went for spot markets,” a senior official explained.

For the record, the discoms bought power at a low cost, lesser than the average approved per unit cost by the APERC, in April and May, leveraging the market, and managed to accrue significant savings. According to the Transmission Corporation of Andhra Pradesh (APTRANSCO), about 850 million units were purchased in April, averaging 15 million units to 25 million units a day, ranging between Rs  2.16 and Rs  2.66 per unit. The discoms netted a savings of Rs  132 crore in April alone, the officials said.