Centralised cell to streamline sale and purchase of power

Shimla, September 17

The state government has decided to establish a single energy trading desk to streamline the sale and purchase of power and related issues. “The move will reshape the landscape of energy management in the state, ensuring efficient short, medium and long-term planning and the economic disposition of energy resources from the next financial year,” said Chief Minister Sukhvinder Singh Sukhu.

He said that nature had blessed Himachal with abundant water resources, having a total hydro potential estimated at a 24,567 MW. Out of this, only 11,150 MW has been harnessed through 172 hydro projects till date. Underscoring the need for enhanced coordination among three key entities, namely the Directorate of Energy (DOE), Himachal Pradesh Power Corporation Limited (HPPCL) and Himachal Pradesh State Electricity Board Limited (HPSEBL), he said that the lack of communication and disparate pricing strategies have sometimes led to power being sold at suboptimal rates and purchased at higher costs.

Sukhu emphasized on the significance of this initiative by pointing out that DOE, unlike the other entities, is not a regulated entity, with all revenues from power sales flowing into government receipts.

“Conversely, power transactions and activities of HPPCL and HPSEBL must be pre-approved by the Himachal Pradesh Electricity Regulatory Commission (HPERC). Therefore, there is a need to establish a centralized cell to streamline power sale and purchase management, ultimately aiming to boost revenues,” he said.

He said that the third Disbursement Linked Indicator underscores the necessity of merging existing trading contracts of the Directorate of Energy, HPPCL, and HPSEBL into the single trading desk and an allocation of Rs 200 crore will be made for its operational needs.

The Chief Minister said that this transformative Single Energy Trading Desk will undertake a multifaceted role. “It will not only optimize power trade but also explore structural and financial aspects to create a unified, independent entity overseeing power trade in Himachal Pradesh, encompassing HPSEBL, HPPCL, and DOE,” he said.

He said that this move aims to establish mutual settlement arrangements within the regulatory framework applicable to power generation and distribution companies. The desk’s advanced capabilities will enable precise energy forecasting for hydro and other renewable sources, enhancing the state’s ability to sell pooled power effectively and maximize the benefits of Renewable Purchase Obligation or Hydro Purchase Obligation.

Will boost revenue

• Chief Minister Sukhvinder Sukhu said the lack of communication and disparate pricing strategies have sometimes led to power being sold at suboptimal rates and purchased at higher costs
• There is a need to establish a centralised cell to streamline power sale and purchase management, ultimately aiming to boost revenues