State-owned power company Mahavitaran will now go in for 25-year power purchase agreements (PPAs) with three private players who will start generation by 2014.
This weekend, the Cabinet sub-committee on energy cleared the proposal to buy 2,450 mega watts daily after they start generation.
The cost will range between Rs 2.88 and Rs 3.26 per unit.
The committee also decided to ensure availability of land for private electricity producers so that they complete projects as quickly as possible.
According to Energy Minister Ajit Pawar, the long-term PPAs with Indiabulls, Adani and GMR Energy
will help Mahavitaran meet
the growing demand for electricity.
The state faces a daily shortfall of 3,500 mega watts and it enforces power cuts of three to 12 hours.
The decision will benefit the city’s eastern suburbs Kanjur, Bhandup, Mulund and Thane and Navi Mumbai and rest of the state.
Private companies that supply to the rest of the city will have to make their own arrangements the shortfall.
Pawar said that his department would ensure that power-ridden state does not suffer much in coming summer.
“We will buy extra power from private companies in summer,” said Pawar.