Electricity Bills Likely To Rise, Tariff To Go Up Under Newly 500 MW Thermal Power Agreement

SRINAGAR, Nov 30: Authorities on Wednesday said that the price for the recent 500 MW thermal power purchase agreement will likely increase the tariff by one rupee per unit in comparison to the existing tariff of hydro power.
Principal Secretary Power Developed Department (PDD) H Rajesh Prasad said that the process to channelize newly purchased 500 MW will be received soon.
“We are more dependent on hydropower. However, we have already made a solar power purchase agreement of 1600 MW that is higher than hydropower,” he said, adding that by December-2024, JK will have solar power too.
The principal secretary however said that in solar energy there is a variability factor during the sunshine day and other dull days so that also have certain limitations.
“Only the thermal electricity generation with either coal or gas is not based on seasonality. Under thermal energy we will have a 24 hours power supply,” Prasad said.
Speaking about the recent agreement of purchasing 500 MW power, the principal secretary further said that the government has already given permission for it.
On asking about the revised tariff per unit for the new power purchase agreement of 500 MW, Prasad said that the agreement is for thermal power.
“The base rate of thermal power will likely be a bit higher than the hydro and solar power.” He said,
“The rate of hydro electricity is around Rs-4.50 paisa per unit, however the thermal electricity price may go up nearly by a rupee per unit from the existing rate to Rs-5.25 paisa or Rs 5.50 paisa. It will likely be a bit costlier but we need that base load for the support. It is a very reasonable rate.”
“With regard to the power purchase agreement of 500 MW thermal energy, I think the supply will come in the coming days,” he said.
Prasad said that the PDD department in the meanwhile was buying power from the power exchange. “Power exchange is very volatile, it is like the share market.”
A power exchange is a trading platform where electricity producers and electricity consumers meet.
There are two types of power exchanges. In power exchanges specialised in physical trading, electricity producers and consumers trade with the aim of the physical delivery of electricity from the producer to the consumer.
“We have healthy and sufficient power purchase agreements to take care of the base load,” he said.
Prasad also said, “Although we have got the permission to purchase 500 MW of thermal power, there are some procedures still to go through from the central electricity authority to get the price approved. I guess that process will get completed in 2-3 days.”