Telangana: Big power users unplug discoms

Hyderabad: Long ago, getting an electricity connection was not easy. But those days are long gone, and officials are now struggling to retain consumers and get new ones, thanks to reforms in the power sector and competition from private utilities.

The emergence of the private sector and the increase in non-conventional energy has led to a drastic drop in the cost per unit. And the introduction of the open access system by the Central government has only tightened the screws on Discoms.

Before the open access system, industries and commercial establishments were dependent on the state government’s power utilities, Discoms.

In the open access system, no industry or commercial establishment needs to depend on the government’s power utilities. It can purchase power from whoever offers it at the lowest price.

The system allows large users of power, having connected load of 1 MW and above, to buy cheaper power from the open market. Consumers only need to pay transmission and wheeling charges to concerned Discoms as decided by Electricity Regulatory commission.

The direct purchase of power by industries and commercial establishments has led TSTransco to lose out on about 1,000 MW power sale. The price of power at TSTransco is more than Rs 5; in the open market, industries and commercial establishments can buy power at below Rs 4 per unit.

With the increase of power production, the cost of power per unit has come down between Rs 3 and Rs 4. At times, it’s available even for Rs 2. In the night, when the demand for power drops, TSTransco sells power at Rs 1.80 per unit.

Many industries and commercial establishments are also installing solar rooftop units. This has also negatively affected TSTransco’s power sales. At present, 2,000 MW are produced via the solar power system in Telangana State.

Solar power has also taken away another major power consumer — the railways. The rail department is also focusing on installing solar rooftop units and purchasing power in open access system.

In AP, the railways purchase 200 MW per day. When the rail department has decided to turn to open access to purchase power, the AP Electricity Regulatory Commission took a proactive role to keep railways from purchasing power from APDiscoms.

The APDiscoms and Railways finally reached an agreement where energy would be sold at the cost of Rs 3.55 per unit. In Telangana, the railways need about 200 MW per day. Telangana State officials are hopeful that the railways will stick to them as there has been no increase in power tariff for 2017-18.