The Hindu Business Line : Now, utilities profit from power crunches through hourly contracts

THE ongoing power shortage situation engulfing much of the country has prompted a handful of electricity utilities to adopt innovative ideas to turn the crisis into a commercial opportunity.

While power trading between States has been taking place on a regular basis over the last two years, utilities are now increasingly getting into more flexible hourly contracts across select days of the week.

For instance, on each Sunday from April to July, CESC Ltd — the RPG-owned power distributor in Kolkata — has entered into a contract to supply electricity to Punjab. According to Government data, CESC has drawn up a schedule to sell 50 MW to Punjab between 8 a.m. and 5 p.m. every Sunday during the four summer months.

With offices being shut in Kolkata on Sundays, CESC has decided to sell the extra power available on weekends to deficient States such as Punjab, where agricultural activity is in full swing and power from any source welcome.

Tripura and Assam are also taking advantage of the recently announced short-term transmission open access norms. Tripura, for instance, is selling power to Punjab during three separate time slots on a daily basis. Assam is also selling power to Uttar Pradesh at different time intervals during the day on a contractual basis across the summer months.

According to State Government officials, short-term open access transactions have got a boost with the Central Electricity Regulatory Commission's (CERC) revised inter-State transmission norms coming into effect.

The CERC had, in March this year, introduced part-day peaking charges for transmission of power (with slabs of six hours each, instead of the full-day charges being levied across the entire day). This has made it cheaper for States such as Punjab and Uttar Pradesh to source peaking power from outside, since they are required to pay charges only for six-hour slabs during a day when they are actually drawing the power.

The payments by the buyer are generally made when the contract is struck, with the remaining payments spread across the contract period. "State utilities are increasingly getting into flexible contracts with power-deficient States to provide electricity during certain hours of the day," a CERC official said.

In its new norms, CERC also provided for an advance reservation of transmission lines based on a monthly timetable, instead of the earlier practice of allocating lines for short-term access on a first-come-first-served basis to players.

Applications are being accepted from players wanting short-term access to a transmission line (for the following month) up to the 19th of every month and the result is being declared on the 25th of each month. In case a large number of players put in their applications for short-term access to a particular transmission line, the regulator has decided to go in for the e-bidding route to determine who gets to use the line.

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