The Hindu Business Line : States buying high-cost power to tide over summer crisis

New Delhi April 1 With the possibility of a power crisis looming large this summer, States are resorting to desperate measures to buy electricity well in advance to tide over the shortages, mostly at exorbitant prices of upwards of Rs 7 per unit during the peak summer months.

Costs have escalated in view of the anticipated shortages in generation across the country, a situation compounded by considerable slippage in capacity addition during the 10th Plan period and the continuing fuel crunch faced by gas-based stations.

States are scrambling to ink advance power purchase agreements starting from April till as late as October to meet the peaking shortages.

While agreements for July to October are easier to negotiate, agreements for May and June are more difficult in view of the demand crunch and are mostly being worked out through non-allocated shares of Central PSUs.

The situation is proving to be a windfall for States with spare hydroelectric power, including Himachal Pradesh, Uttaranchal and the North-Eastern States.

Delhi, Haryana and Uttar Pradesh are among States that have tied up in advance.

Captive power owners in Maharashtra's industrial townships such as Pune are getting requests for supply of excess power to industrial and domestic consumers at close to Rs 10 per unit.

Delhi has constituted a Power Procurement Group - a joint mechanism by the Government and private distribution companies to oversee shortfall in power requirements - to buy power in advance.

While 750 MW will be procured from Madhya Pradesh, about 250 MW will be bought from Himachal Pradesh to make power available round the clock from July to October.

Delhi is also tying up with trading PTC Ltd for sourcing 157 MW from Kerala during the April-June period.

Both Uttar Pradesh and Haryana are inking power purchase arrangements for May and June.

Rajasthan is procuring electricity through bilateral arrangement to meet increased demand.

The State is already procuring wind power to the tune of 600 MW, which might increase up to 1,800 MW in two years.

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