The spot prices of electricity in the southern region of the country have seen a rise in the past three months, due to the ongoing Assembly election campaigns in Tamil Nadu, Kerala and Puducherry. The governments there have directed the utilities to ensure there are no power cuts.
As a result, the utilities are buying from power exchanges at prices as high as Rs 14.50 per unit during some hours of the day. The prices for the rest of the country during the same period are less than Rs 4 per unit.
However, West Bengal and Assam, also on the verge of polls, have not seen such an increase in prices, since the region is already power-surplus and well connected to the rest of the country through a complex network of transmission lines.
| HIGH VOLTAGE (IN Rs) | |||||
| Month | Minimum Price (RI) | South Region | Maximum Price (RI) | South Region | Average Price |
| January | 0.99 | 0.99 | 5.40 | 7.00 | 3.41 |
| February | 1.69 | 1.79 | 6.25 | 18.00 | 4.29 |
| March | 1.14 | 1.73 | 6.49 | 14.50 | 3.40 |
| Source: Power Exchanges | |||||
An Indian Energy Exchange (IEX) official told Business Standard: “The higher prices are also attributed to the congestion in the transmission corridor between the southern region to others. The electricity price trend is expected to continue till at least the end of April.” IEX, which is engaged in day-ahead and week-ahead power trading, has a daily turnover of 40,000 Mwh.
An official at Power Exchange India (PXI), also engaged in day-ahead and week-ahead power trading, with a daily turnover of 4,000 Mwh, said Tamil Nadu had been drawing excess power for six months. The present trend in electricity prices would continue till elections were over.
Industry sources said: “Once the elections get over, the consumers will be burdened with higher power bills when the utilities approach the regulators for a revision. Though the utilities are at present buying power at higher prices, the ultimate brunt is to be borne by the consumer. The capacity addition in southern India, in comparison with the demand growth, is on the lower side. High agricultural load has worsened the situation.”
Power analyst D Radhakrishna said: “The Central Electricity Regulatory Commission should have monitored the situation by introducing a cap on electricity prices, as the regulator had done during the 2009 assembly elections held in Maharashtra. The financial health of power utilities will be further hit due to purchase of costly power and selling it to the consumers at a tariff determined by respective state power regulators, which is around Rs 4 per unit only.”
