State to spend Rs 400 cr to purchase power

Power-starved Karnataka, which is facing a shortage of 20 million units per day, is planning to spend Rs 350-400 crore over the next three months to purchase 400 Mw power from independent power producers. Last year, the state spent nearly eight times more at Rs 3,000 crore to purchase power for the short-term, from November 2008 and May 2009 to tide over the crisis, a senior government official said.

“Last year was a very bad year for us. We spent huge amounts to purchase power from private producers from November 2008 onwards to tide over the crisis. This year the situation is much better because of the good rains. The demand and supply situation is slightly comfortable and we have managed till now. We have started purchasing from the private sector only from February and hope to manage the summer months quite comfortably,” K Jairaj, additional chief secretary, government of Karnataka told Business Standard.

He said the state has started buying 200 Mw from Jindal from February 1 onwards at the rate of Rs 4.50 per unit. Presently, the state is purchasing 4.8 million units per day from Jindal. There are plans to purchase another 200 Mw very soon to manage during the summer months upto May, for which tenders have been floated, he said.

The proposed purchase of 200 Mw will be for two months-ending March. In addition to the short-term purchase, which will last till March-end, the government is also planning to purchase another 750 Mw on a medium-term basis for the next one year.

The Power Company of Karnataka Ltd (PCKL), floated recently by the state government to purchase power, has floated tenders from power producers and the bids will close on February 22. The tariff for long-term purchase would be worked out depending on the rates prevalent during that period. Power tariff is likely to go up in April as there will be a shortage of power across the country, sources said.

According to energy department sources, the government has started negotiations with various independent power producers, including cogeneration sugar mills, to fix tariff for short-term power to be purchased from them. “The cogeneration sugar mills are demanding Rs 7 per unit, but we have offered them upto Rs 5 per unit. Last year, the tariff was fixed at Rs 6.50 per unit,” source said.

Presently, the daily demand for power reached 137.5 million units as on February 8, 2010 and this is likely to go up to 140 million units per day in March as examination days are nearing. The state is facing a shortage of power due to the tripping of two units at Raichur Thermal Power Station (RTPS) and a drop in supply from the Central grid. Karnataka’s share from the central generating stations has come down by over 600 Mw.

As of now the state gets 6,200 Mw a day from its stations and the Central grid. From hydel stations 36 million units and 41 million units from thermal stations is available. The mini hydel stations contribute another 12-13 million units. The state draws another 396 Mw per day from the Central grid under unscheduled interchange system, which is drawn between 11 pm and 5 am at Rs 3.50 per unit, the sources said.