Mumbai power companies scurry to meet rising demand in city

Power distribution companies in Mumbai are procuring additional electricity through short-term agreements to meet rising summer demand

Mumbai: With peak summer on and heat waves the norm, power distribution companies are rushing to meet rising demand either by signing short-term agreements or buying expensive power from the open market.

Officials at power distribution company, PVVNL, Noida, said that the discom is working on the repair work in different parts of the city and the issues raised will also be addressed (REUTERS/representational image)

Tata Power, which had anticipated a shortfall of 50-150 megawatt (MW) between April and June, will now procure additional electricity through a short-term power purchase agreement. The company received a go-ahead from the Maharashtra Electricity Regulatory Commission (MERC), a quasi-judicial body, on April 20.

Tata Power, which has 750,000 consumers, has stated it will need at least 25 MW round the clock, with the requirement touching 100-150MW during peak hours (4-10 pm). As per the MERC order, Tata Power will procure 25 MW per day in April, May and June at a cost of ₹7.12- ₹7.23 per unit. The company will source the remaining power from the open market and energy exchanges at ₹10 per unit. This analysis of additional requirements was presented in December 2023.

Sources said MERC examined the rates finalised by 8-10 power distributors across India before giving a go-ahead to Tata Power. “The power purchased through a short-term agreement having a fixed price will join the larger pool in the grid, from where it will be distributed to the consumers. This will certainly have an impact on the power bills in the future,” said a power expert.

Tata Power also provides 472 MW to the Brihanmumbai Electricity Supply and Transport (BEST) Undertaking for its 1.05 million consumers. BEST’s power demand is touching 850 MW, but it only has agreements in place for 732 MW.

MSEDCL, which has a consumer base of 2.5 million across Mulund, Bhandup and Vikhroli, recently got approval to procure short-term power at ₹7.65- ₹7.90 per unit for April and May.

Likewise, Adani Electricity, which has almost 2.7 million consumers, has seen a peak demand of 2,100 MW and has power purchase agreements in place. The company has been allowed to recover ₹54.5 crore as fuel adjustment charges. This will have an impact wherein at least the residential consumers will pay anywhere between ₹0.70 and ₹1.70 per unit in May, June, July and August.

An Adani Electricity spokesperson said, “To address the rising fuel and power purchase costs, the honourable commission has approved a temporary Fuel Adjustment Charge (FAC), which shall be in effect until August 2024. Even with these adjustments, our tariffs shall continue to remain most competitive across the majority of tariff categories.”

With the mercury rising, Mumbai’s peak power demand surpassed 4,100 MW last week and is hovering around 3,500-3,900 MW per day. The India Meteorological Department (IMD) is forecasting the temperature in Mumbai to cross 37C between April 27 and April 29.