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HindustanTimes Sun,31 Aug 2014

Haryana stuck with 'surplus' electricity

Navneet Sharma, Hindustan Times  Chandigarh, May 24, 2013
First Published: 00:51 IST(24/5/2013) | Last Updated: 00:58 IST(24/5/2013)

Call it a problem of plenty or blame it on poor planning, Haryana is stuck with "surplus" electricity on which its power utilities lose money when they enter the market to sell it.

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The two state-owned power utilities, Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN), will sell 11,483 million units - 22% of the total power available to them - of excess electricity outside the state in the current financial year. Of the projected availability of 52,570 million units, the two distribution companies (discoms) will supply 41,086 million units of electricity to its consumers within the state, selling the surplus power outside the state through bilateral agreements or the power exchanges.

The inter-state sale of power varies from time to time depending on sharp fluctuations in demand from consumers within the state. UHBVN and DHBVN, which get power from own generation units, share in central projects and long-term power purchase agreements, are likely to incur financial loss on the sale of "surplus" power.

While their average bulk power purchase cost works out to Rs. 3.50 per unit, the two discoms proposed the sale of excess power at an average rate of Rs. 3.16 per unit. In the past few days, the corporations have tried to sell their surplus power, but are not getting "compensatory rates", sources told Hindustan Times.

Last year, the discoms had incurred a loss of around Rs. 500 crore on such inter-state sale of "surplus" power. The hapless consumers may have to bear the burden as the discoms now want to recover their loss from them. Power sector experts blame multiple long-term power purchase agreements without proper assessment of load growth, poor planning and absence of adequate demand management measures for the current situation. Also, the discoms have largely contracted power from base load plants instead of peaking power plants, which can be switched on and off as per requirement.

"The corporations have no scientific method of demand assessment in both peak and off-peak hours, thereby, effectively hoarding generation capacity without adequate arrangements for evacuation and onward supply. In peak load hours, there are system constraints. In off-peak hours, they have surplus power and are stranded with generation capacity for which they are liable to pay fixed charges. If power is under drawn from the grid, they usually get lower UI (unscheduled interchange) charges," an expert said.

However, discom officials defend the current situation as a consequence of long-term power purchase agreements and substantial increase in own generation with long-term vision and to cater to the future demand. These power purchase contracts would be of great help in the coming years because of the rising demand, they said.

"For instance, the demand is up by 12% in the past 3-4 days, but we are comfortable. No power cuts have been imposed on any consumer category. The demand will see a sharp jump when sowing of paddy starts in June. We are preparing ourselves for that," they said.

Discoms' chairman and managing director Devender Singh was not available for comment.

Haryana Electricity Regulatory Commission (HERC) had, in a recent order, commented that the excess availability of power was due to mismatch between the power availability and ability of the licensees (discoms) to supply the same to the consumers in an efficient manner. "The inter-state sale of power should be managed in such a manner that the consumers are not made to suffer due to the inability of the two discoms," the commission had written.

Power scenario in 2013-14
Distribution companies: UHBVN & DHBVN
Power available for sale: 52,570 million units
Power available for sale within Haryana: 41,086 million units
Inter-state sale: 11,483 million units
Mode of inter-state sale: Bilateral agreements and through power exchange

Why excess availability of power?
Multiple long-term agreements without proper load assessment
Mismatch between availability and ability to supply the same
Poor demand side management
Constraints in distribution system

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