India's state electricity distribution firms shelled out higher tariffs since Q4 2018

States have bought power at an average rate of $0.087 per unit.

India’s state electricity distribution companies have paid much higher tariffs to buy power on short-term contracts over the last few months, shelling out a few thousand crore rupees more than they did for spot market buys, ETEnergyworld reports.

As a result, questions have been raised over prudent power procurement at these power distributors at a time when many are cash-strapped due to rising electricity costs.

Also read: India's power losses up 62% to $3.4b as costs skyrocket

States have bought power at an average rate of $0.087 (IND6) per unit from November 2018 to May 2019, according to an ETanalysis of short-term power purchases.

“In some cases, they have bought power at around $0.17 (IND12) per unit for a block of 10-15 days, an analysis of the letters of intent of such power purchases at the portal showed,” the report said.

The report also noted that Maharashtra State Electricity Distribution Company could have saved up to $23m (IND1.6b) for power purchased in November, December, March, April, May and June, according to rough estimates.

“Tamil Nadu discoms could have saved up to $66m (IND4.52b) for purchases in February, March, April and May. Telangana has incurred up to $78m (IND5.34b) more for power procured via DEEP portal in January, February and March,” the report added.

States prefer the government’s bidding portal over power exchanges to avoid last minute uncertainties in availability, an executive of a Madhya Pradesh discom was cited.