Andhra Pradesh

SCR seeks to buy power for traction network from cheaper sources

APERC Chairman Justice (retd.) C.V. Nagarjuna Reddy addressing a public hearing in Vijayawada on Thursday.

APERC Chairman Justice (retd.) C.V. Nagarjuna Reddy addressing a public hearing in Vijayawada on Thursday.   | Photo Credit: V. RAJU

The tariffs being charged by A.P. power utilities are huge, it says

The South Central Railway (SCR) is likely to start buying power for its traction network in Andhra Pradesh through the open access route due to rising tariffs being charged by the State power utilities.

In fact, SCR’s chief electrical distribution engineer G.V. Mallikarjuna Rao requested A.P. Electricity Regulatory Commission (APERC) Chairman Justice (retd.) C.V. Nagarjuna Reddy to issue a No-Objection Certificate (NOC) for sourcing power from cheaper sources, at the public hearing on Discoms’ Annual Revenue Requirement (ARR) and proposed tariffs for 2020-21 here on Thursday.

Making a plea to that effect, Mr. Mallikarjuna Rao said the Indian Railways had gone for open access in 12 States, and it would prefer the same in SCR, which included the Vijayawada, Guntakal and Guntur divisions.

The SCR had already paid nearly ₹28 crore for provision of high accuracy Availability-Based Tariffs (ABT) meters at the traction substations that help in monitoring and billing bulk inter-utility power flows.

Having met other pre-conditions, the SCR sought the NOC by treating it as a distribution licensee under Section 14 of the Electricity Act, 2003.

Overall burden

Mr. Mallikarjuna Rao further said that the average unit rate, which was ₹5.14 earlier, was sought to be increased to ₹7.89, and energy charges by ₹2.75 per KVAh. The demand charge stands at ₹350 per KVA. The overall burden on account of the increased tariffs was estimated to be ₹430 crore.

Besides, the Railways is paying huge sums towards cross-subsidy surcharge. It has, therefore, resolved to buy power from independent producers, or energy exchanges, at the tariffs that are affordable for it.

Electrification projects

The SCR has completed 887-km of electrification projects in the last two years, and works are in progress on another 955-km stretch. Besides, 1,564- km of electrification projects have been proposed.

The crux of the issue (purchasing from the State power utilities) is that higher traction tariffs will slash the rate of return for the new railway electrification projects.

The Railways is requesting a special consideration to go for open access with the basic argument that a hike in tariffs will eventually force it to pass on the burden to traders and passengers as a last resort, leading to a spurt in commodity prices and inflation.

It can’t avoid electrification lest the utilisation of diesel should grow tremendously.

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Printable version | Jun 4, 2020 8:30:22 AM | https://www.thehindu.com/news/national/andhra-pradesh/scr-seeks-to-buy-power-for-traction-network-through-open-access/article30524993.ece

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