Tamil Nadu Electricity Regulatory Commission (TNERC) has fixed the pooled cost of power purchases, or the average price at which it buys power from various sources, at ₹3.70 per unit for financial year 2017-18. The amount fixed is 7% lower than the cost of ₹3.96 per unit set last year.
The tariff is made effective from April 1, 2017.
TNERC also clarified that the pooled cost of the power is ₹3.70 per unit or 75% of the preferential tariff it fixes for procurement of power for conventional and other non conventional sources like wind and solar. Preferential tariff is the rate at which the State prefers to sign power purchase agreement and can be much lower than the general tariff fixed by the regulator.
According to research firm Mercom Capital, the pooled cost of Tangedco has fluctuated over the past three fiscal years. In FY 2015-16 it was ₹3.35 per unit, rising to ₹3.96 per unit in FY 2016-17, then falling to ₹3.70 (~$0.056)/kWh this fiscal year.
Tangedco has been buying more of low-cost power and at the same time demand has not increased much and there is no immediate requirement to buy high-cost power, the firm said. Tangedco recently signed power purchase agreement to procure 1500 MW of solar power at the rate of ₹3.47 per unit. Wind tariff hit a low of ₹3.42 per unit in Tamil Nadu’s first ever competitive auction for procuring 500 MW of wind power.