Power procurement from market yielding positive results: Discoms

File response to objections regarding aggregate revenue requirement, retail tariff supply 

Published: 14th January 2021 03:13 AM  |   Last Updated: 14th January 2021 03:13 AM   |  A+A-

For representational purposes

By Express News Service

VIJAYAWADA: In response to the objections raised by stakeholders and state power engineers associations questioning the logic behind procurement of power from markets despite being a power surplus state, the power distribution companies (Discoms) have maintained that they were resorting to market as a source of purchase only under “emergency conditions” to avoid load shedding.  

The Discoms also said there was no loss to the state-owned thermal units as against the objection that power procurement from markets was “adversely” affecting them as they were being kept in reserve shutdown to enable market purchases. The Discoms filed their response to the objections and suggestions filed by various stakeholders regarding the aggregate revenue requirement (ARR) and retail tariff supply for 2021-22 ahead of the public hearing scheduled by the AP Electricity Regulatory Commission (APERC) from Monday. 

Replying to the submissions made by the public and other stakeholders, the Discoms said market procurement was “certainly giving positive impact” by means of cost optimisation. “...the Discoms are resorting to market/bilateral agreements source of purchase under emergency conditions only with a dire requirement to avoid load shedding·and consequential inconvenience to the public,” the Discoms said, adding that market purchases are being done after exhausting the available committed sources.

The Discoms also rebutted the one of the claims by the AP State Electricity Board Assistant Executive Engineers’ Association that the AP State Load Dispatch Centre (APSLDC) was keeping energy exchange price in merit order dispatch (MoD). “Energy exchange is not kept as a source in merit order dispatch list as contended by the objector. Market price is fluctuating on a daily basis and in fact is varying every time block in Real Time Markets and it is not possible to consider a single price to be able to enlist the same in MoD list. MoD principles are strictly adhered to in procuring power and whenever market prices are lesser, thermal plants are asked to go for reserve shutdown and paid their due fixed charges without any loss to them,” the Discoms explained. 

The Discoms further noted that they would “plunge into financial crisis” if the APERC treats the approved price for market purchases as the ceiling price. If the expenditure is limited, it would mean denying the Discoms their legitimate expenditure incurred in the interests of maintaining uninterrupted power supply to consumers, the Discoms said.

What Discoms say 
They are resorting to market as a source of purchase under “emergency conditions only with a dire requirement to avoid load shedding”
There is no loss to State-owned thermal units



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