Cheap power rates bring down cost of service

From Rs 48,110.79 cr in 2018-19, cost of service comes down to Rs 43,327.56 cr in 2019-20, a saving of Rs 4,783.23 crore.

Published: 15th June 2020 10:02 AM  |   Last Updated: 15th June 2020 10:02 AM   |  A+A-


Image for representational purpose only. ( File | EPS)

Express News Service

VIJAYAWADA: The steps taken by the state energy department to bring down power purchase costs and reduce other expenditure of the power distribution companies have resulted in significant reduction in the cost of service. 

From Rs 48,110.79 crore in 2018-19, the cost of service has come down to Rs 43,327.56 crore in 2019-20 (provisional data), accumulating a saving of Rs 4,783.23 crore, according to the transmission corporation of Andhra Pradesh (APTRANSCO).

In view of Assembly session scheduled to begin from Tuesday, the power utilities have submitted a comprehensive report to the State government on the efforts taken to achieve cost effective power and to strengthen the power sector. The report highlighted the steps taken by the government to revive the beleaguered power sector.

Explaining how the cost of service was brought down, the report said that the APSPDCL purchased power at cost of Rs 14,920 crore in 2015-16 against its revenue of only Rs 11,546 crore, at Rs 15,076 crores in 2016-17 against the revenue of Rs 12,157 crore and at Rs 16,642 crore in 2017-18 against the revenue of Rs 13,609 crore. It was Rs 19,113 crore in 2018-19 against the revenue of Rs 14,956 crore, the report noted. The officials said in the report that the power purchase cost accounts for 75 per cent of the cost of service. 

As the power purchase costs were brought down in the last one year, it helped in bringing down the cost of service.  Quoting the current status of power sector, Energy secretary Srikant Nagulapalli said that the country witnessed a steep fall in electricity demand, which resulted in higher availability of generating resources, prompting the power prices to plummet considerably. 

“In this scenario, Andhra Pradesh discoms took maximum benefit of low market power prices in the power exchanges. Further, to use this low cost power opportunity, discoms, through the state load despatch centre, optimised the schedules by following merit order despatch,” the Energy secretary explained.
Following the directions of Chief Minister Y S Jagan Mohan Reddy, now the utilities are purchasing power at an average price of Rs 1.63 to Rs 2.80 per unit. 

Srikant appreciated APTRANSCO JMD KVN Chakradhar Babu and MDs of discoms for the savings.
In the report, they revealed that the State government has released the power purchase dues left behind by the previous government and subsidy arrears to bail out the power utilities, which were caught in severe financial crisis. “The government had released total Rs 17,904 crore in 2019-20 towards clearing subsidy arrears and departmental charges payable. In turn, the discoms have released Rs 20,384 crore to clear the bills of power generators as on March 31, 2019, which were pending since one year,” the report said.  


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