VIJAYAWADA: Chairperson of the Andhra Pradesh Electricity Regulatory Commission (APERC) justice CV Nagarjuna Reddy said that the commission has been focusing on rationalisation of power purchase costs to ensure that consumers are not burdened unnecessarily.
He added that the commission directed the power distribution companies (Discoms) ‘strictly’ not to go for power purchase, including short-term, unless it is urgent.
The three-day public hearing on aggregate revenue requirement (ARR) and retail business tariff for 2021-22, during which several people raised reservations against purchase of power from markets and short term purchases when the State has surplus power, concluded on Wednesday.
APERC’s chairperson said, “The commission is in complete agreement with the objectors’ concerns on excess power procurement. Major expenditure for Discoms is power purchase and if that is not rationalised, it will lead to higher costs. Hence, the commission has been carefully taking decisions in this regard. An example for this is not including firms with whom there is no power purchase agreement (PPA) in the purchase list and giving permission to short term purchases, which helped in saving Rs 200 crore. We strictly told the Discoms to go for market purchase only in emergencies, and that is how they are doing it.”
He added that Discoms were also directed to submit the proposals for purchase of power in short term 15 days in advance, following which the commission would strictly examine if it was needed and then clear it.
“So, the public need not have any concern over power purchase as it is closely being monitored by the commission,” he added.
In the three days of public hearing, 68 people have submitted their objections and suggestions, justice CV Nagarjuna Reddy said. Most of the objections were raised over purchase of power from markets, installation of meters for agriculture connections under Dr YSR Free Agriculture Power Scheme and 10,000 MW solar plants.
The chairpersons and managing directors of the three Discoms — APSPDCL, APEPDCL and APCPDCL — submitted their responses to the objections to the commission as well. The officials said that though the State has surplus power, they are going for market purchases as the majority of available power is from variable renewable energy sources, which are not completely reliable. They, however, said that the objections would be examined.
Regarding metering of agriculture connections, the Discoms’ said that it would help farmers seek accountability from the power companies, and also ensure transparency. As several farmers organisations, especially tenant farmers associations, opposed the proposal, the Discoms said that no farmer would lose their benefits.
About the 10,000 MW solar power plants, the Discoms noted that it was a policy decision of the government and that there was little say for the power utilities.
Reverse tendering for PPAs suggested
One of the interesting suggestions given to the Discoms and the APERC during the three-day public hearing is that reverse tendering be implemented even in the renewable power purchase agreements (PPAs).
As the prices of renewable energy are going down, some of the stakeholders and public suggested that reverse tendering be incorporated while signing the PPAs, which will help in deriving the lowest price. To this, the Discoms’ heads said, “Since the matter of reviewing renewable PPAs is sub-judice, we will examine the suggestion after the court’s order.”