APERC ‘erred’, market purchase saved Rs 22.7 crore: Energy department

VIJAYAWADA: A day after the AP Electricity Regulatory Commission’s (APERC) missive to the state government over power procurement from markets surfaced, the energy department claimed that the commission has “erred” in calculating the “hypothetical loss” by taking normally available energy instead of the actual energy available from the approved sources. In fact, the distribution companies (Discoms) accrued a monetary saving of Rs 22 crore between December 17, 2020, and January 15, 2021, the period in which the commission analysed the sales, as against the Rs 48 crore loss observed by the APERC, it said. 

The Energy department issued a clarification over APERC’s letter on Thursday and stated that while the normative available energy from the generators (as per power purchase agreements) in the said period was 3,289.3 million units, the actual energy availability declared for supply by the generation companies stood at 2,470.79 MU. “Finally, the actual energy supplied by these generators was 2,253.27 MU. There was a shortfall of 819.3 MU from these generators, as compared to the Commission orders, who did not make this energy available for supply and hence the same was unavailable to the Discoms for dispatch. The Discoms scouted for the cheapest power available to bridge this shortfall, resorted to market purchases and got a savings of Rs 22.7 crore,” the statement said.

For the record, the APERC, in its letter dated June 8, noted that instead of utilising 1,036 MU available from the approved sources, the Discoms went for market purchases. “Had the above energy of 1,036.03 MU been dispatched during the period from December 17, 2020, to January 15, 2020, the weighted average variable cost of which is lesser than the weighted average landed cost of energy from the exchanges, there could have been a potential saving of Rs 48.14 crore to the Discoms ,” the commission’s letter to the threeDiscoms said.

However, the Energy department found fault with the commission’s analysis. “ The commission ought to have considered real-time availability as declared by the approved sources. Instead, it considered normative approved availability given in the Retail Supply Tariff Order. During the real -time operation for the period under consideration, the availability declared by approved generators is way less than their normative availability under Retail Tariff Order. Thus, the commission has erroneously calculated hypothetical loss comparing to energy from power plants which was unavailable at that time,” the energy department explained.

In fact, the state department claimed that going for the purchases has helped it save Rs 22.7 crore in the said period. Explaining that the average price of market purchases for the above period was Rs 3.38 per kWh (after excluding Rs 0.19 /kWhAP TRANSCO charges which are refunded), the energy department said that the average price of alternate power available during that period from the approved sources was Rs 3.68per kWh (excluding Transco charges). Thus, there was a savings of Rs 0.3 per kWh, the department calculated.“Owing to market purchases and not dispatching the energy from the approved costly stations, there was a savings of Rs 22.7 crore. There is absolutely no loss of Rs 48 crore,” the statement added.