Andhra Pradesh Electricity Regulatory Commission has constituted a three-member expert committee to study and submit a report on the appropriate methodology for approval/ratification of short-term power purchases.

This assumes importance as power purchase cost constitutes about 80 per cent of the (annual revenue requirement) ARR of the discoms. The Commission has been endeavouring to reduce the power purchase costs so that the end consumers are spared the burden of paying excess tariffs.

The Committee comprises Usha Ramachandra, Professor & Director, Center for Energy Studies, Administrative Staff College of India; N Sree Kumar, Prayas; and M Sivarami Reddy, Chief Engineer (Retd), APSEB.

Part of the power purchase costs is on account of the short-term procurement of power from the market to meet the gap between demand and supply. Objections are being raised time and again on the need to procure short-term power when the State is in an energy surplus situation.

While the State is in an energy surplus situation when considered on an annual basis, the unpredictable and intermittent nature of generation from the significant quantum of renewable sources in the State is resulting in a gap between demand and supply during certain time blocks or seasons forcing the discoms to go for short-term procurement to bridge the gap.

A rational methodology, which accurately forecasts demand, will help discoms to contract the short-term procurement in advance at cheaper prices.

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