Regulator directs UP Power Corp to buy cheap spot electricity

COMING down heavily on the Uttar Pradesh Power Corporation for not buying cheap spot power despite it being easily available on the power exchanges, power regulator Uttar Pradesh Electricity Regulatory Commission (UPERC) on Friday directed Uttar Pradesh Power Corporation (UPPCL) to submit a power purchase plan showing how it will take advantage of cheaper power either through energy exchanges or other sources.

The commission has also said that it would monitor the steps taken by UPPCL in the future on a monthly basis and that UPPCL should submit the details of monthly power procurement to the commission, highlighting the efforts made by it in light of observations made by UPERC.

Speaking to FE, an official of the commission explained that while discoms have long-term PPAs with power companies, they should still be on the lookout for or plan for cheaper power on a daily basis, so that powerpurchasecostcanbebrought down.

“The commission still feels that the problems narrated by UPPCL are relevant for load management but there is still ample scope to utilise the opportunity of lower prices in the exchange. In fact, the commission’s emphasis is not on utilising the exchange in the crises month of April, May and June; rather, it wants to emphasise upon the fact that, on a regular basis, some quantum of power can be sourced from the exchange without jeopardising the load management.”

Stressing the fact that UPPCL has so far tried to use the opportunity of exchanges in the summer when power demand is in excess of availability from long-termsources,thecommission further said, “Our objectiveistointroduceaphilosophy of scheduling on an every-day basis, in which, before giving the schedule, the opportunity of cheaper power from exchanges is explored and an effortismadetoreducethepower purchase cost. The commission is aware of the fact that the variable cost of many projects including some of the UPRUVNL’s projects is higher than the usual prices in the exchange. The opportunity of cheaper prices in the exchangescanbeutilisedbyUPPCL by reducing the load of costly power stations to the technical minimum.”