Discoms in AP spend nearly ₹3,500 cr on short-term power procurement from exchanges

Time of India

7 days ago

High-volume power purchases from exchanges by the distribution companies (DISCOMs) are placing a significant financial burden on consumers. In the last fiscal year, the DISCOMs spent nearly ₹3,500 crore on
short-term power procurement
from exchanges — exceeding limits set by the
Andhra Pradesh Electricity Regulatory Commission
(APERC).
Despite a surplus in installed power capacity, utilities are frequently shutting down state-run generation plants citing maintenance or technical issues — while resorting to costly exchange purchases. These short-term buys have escalated the sector's debts due to astronomical prices. Instead of making use of its own generation plants, the power utilities are often resorting to power purchases citing sudden demand increase or technical glitches in the operation of the plants.
According to the affidavit filed with APERC, the power utilities disclosed that they purchased 5282 million units from the open market during 2024-25 financial year. This caused a massive burden as the procurement cost is around 6.78 per unit. The power utilities spent close to ₹3,580 crore exclusively for the purchase of power. The discoms have already collected ₹2787 crore from the power consumers on the pretext of FPPCA charges during the last fiscal and raised a request for collection of another ₹870 crore.
In fact, the discoms revealed that they have purchased 8617 million units of power through short-term purchase during 2022-23. Surprisingly, APERC put a cap at 3675 million units for short-term purchases during 2022-23. However, the power utilities purchased 8617 million units at a cost of 9.62 per unit. The discoms spent close to ₹6670 crore for the purchases in a single fiscal year. Subsequently, the discoms simply transferred ₹6000 crore burden to the commoners in the name of FPPCA charges.
The situation further deteriorated during 2023-24 when the discoms purchased a whopping 11,753 million units from the exchanges. "They have spent close to 8972 crore for power purchases from exchanges causing massive burden on the commoners," said CPM leader Ch Baburao. In fact, APERC allowed the discoms to purchase only 1551 million units. However, the power utilities purchase almost 10,000 million units over and above the cap fixed by the APERC. The discoms transferred nearly 9,412 crore burden to the commoners due to the short-term purchases.
"The forecasted grid demand varies due to weather conditions and the forecasted generation vary due to outages of thermal generation or variation in renewable energy generation. In order to balance the load-generation on real time basis, the APDISCOMs overdraw/under draw from the grid. Also when there is shortfall in declared availability vis a vis the grid demand, DISCOMs are procuring shortfall from power markets, exchanges/e-bidding portal in order to ensure 24X7 power for all. A quantum of 5282.96 MU @ 6.79 per Unit was procured under short term/market. A quantum of 9 64.88 MU was sold through short term at a cost of 4.45 per unit," explained SPDCL Chief General Manager (CGM) V Sobha.
CPDCL CGM K Venkata Krishna said that the availability of thermal stations decreased by 2056.56 MU(8.00 per cent) when compared to approved availability. Accordingly, the energy despatch from
APGENCO
thermal stations is also decreased by 1,490.75 MU than the approved quantum. He said that a quantum of 5282.96 MU @ 6.79 per Unit was procured under short term/market," said CGM.