Punjab Newsline
CERC put a cap of Rs. 8 per unit on selling of power
VINOD KUMAR GUPTA
Saturday, 12 September 2009
NEW DELHI: Central Electricity Regulatory Commission (CERC ) has finally put a cap of Rs. 8 per unit on the price on Saturday that a power producer can charge from the buyer to check price volatility in the market.

CERC in its order has fixed a price band of 10 paise per unit to Rs. 8 per unit per unit for interstate day ahead market and would be applicable to power exchanges also. CERC has fixed the tariff limits after taking in to account comments, suggestions of various stakeholders at a public hearing held on September 8.

The representatives on five state power utilities participated in the public hearing. These included West Bengal, Himachal Pardesh, Madhya Pardesh and ,Tamilnadu . All state utilities except West Bengal supported the capping of price on power to be sold on short-term basis.

Padamjit Singh Chief Engineer (Retd) PSEB informed that he participated in the public discussion on behalf of consumers. He suggested that earlier proposed cap of Rs. 5 should be maintained He opposed the proposal of adopting UI rate of Rs. 10.29 per unit in working out the cap. The maximum UI rate is Rs.7.35 per unit excluding penalty and that would be basis for working out the cap.

Power producers who had set up electricity plants without long-term power purchase agreements with either the state or electricity distributors were opposing the move. They were selling electricity in the short-term market to those who are facing a temporary shortfall. During high-consumption months of June and July in north India, distribution firms buy power at any cost to maintain supply as per dictates of their political bosses.. This inflates the retail tariff payable by the consumers and merchant power producers were charging abnormally high prices ,sometimes as high as Rs 15 per unit for peak power