Power Minister Opens a Bidding Portal, Reduces Tariff in few States

By siliconindia | Thursday, 26 May 2016, 05:16 Hrs

BENGALURU: Power Minister’s recent move to channel procurement of short-term power by states has been well received so far. The process makes use of reverse auction option on their e-bidding platform. Tariffs went down by more than a third as compared to a year back with the first round of bidding on the DEEP (Discovery of Efficient Electricity Price) portal. The DEEP bidding process was initiated in the country owing to the efforts of Uttarakhand, Kerala, Bihar, and private discom Torrent Power.

In Kerala, people obtained rates as low as Rs 3.14 per unit, which is the lowest value for May. This rate comes in stark contrast to the rate fixed for the previous year to pay round-the-clock supplies, i.e. Rs 4.70 per unit. Similarly, Uttarakhand received a price of Rs 2.59 per unit, the lowest for July on round-the-clock basis. This value too defeats the previous year’s value of Rs 3.41 per unit at which state discoms had procured short-term power. Bihar too received the lowest rate for July at Rs 3.08 per unit, and the state hadn’t previously procured power through bidding. Rate as diminished as Rs 2.95 per unit was received by Torrent Power. Torren hadn’t procured short-term power in the tenures of 2014-15 and 2015-16.

States of Uttarakhand and Kerala had their bidding concluded on April 29^th, followed by Torrent Power on 3^rd of May, and Bihar on the 9^th. This would imply that discoms would be able to procure power at much lower prices, which would at the end benefit the consumers.

The portal was inaugurated last month by power minister Piyush Goyal, and as a subsequent decision procurement of short-term power through reverse e-bidding was made mandatory for discoms. The motive behind this decision is to discourage opaque procurement deals at high prices. Moreover, the move would help to forge transparency and cost-efficiency into discom operations. Furthermore, Goyal has made it compulsory for all states to put their power purchase data on the portal within a month. As for additional perks, every first five states to enter their data on the portal within a week would be awarded.