Maharashtra: MSEDCL earns Rs 400 crore from power trade with other stateshttps://indianexpress.com/article/india/maharashtra-msedcl-earns-rs-400-crore-from-power-trade-with-other-states-4638011/

Maharashtra: MSEDCL earns Rs 400 crore from power trade with other states

In a bid to bolster its poor financial situation, MSEDCL has entered into short-term agreements with states such as Karnataka and West Bengal

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Despite being in surplus, sometimes the distributor is forced to purchase power from other generators. (File Photo)

The State electricity distribution company, which has an annual surplus of around 2,000-3,000 MW has managed to earn over Rs 400 crore through power trading and agreements with other states.

In a bid to bolster its poor financial situation, the Maharashtra State Electricity Distribution Company Ltd (MSEDCL), which has accumulated losses of over Rs 3,000 crore, has entered into short-term agreements with states such as Karnataka and West Bengal. Apart from losses owing to the long-term power purchase agreements signed with generation companies almost a decade ago, the MSEDCL also had arrears worth Rs 29,000 crore by bill defaulters.

“We have sold power worth around Rs 250 crore until January. The duration of these agreements vary from 15 days to three months,” said a senior official from the finance department of MSEDCL. Last month, the MSEDCL signed an agreement with the UP government to provide 700 MW of power for two months at the rate of Rs 3.92 per unit.

“According to our mid-term projections, for periods when the projected demand is lower than our capacity, instead of backing down our system, we sell power to other states,” said the officer. In the last financial year, the distribution company participated in 20 such tenders and won five.

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In yet another measure, the company trades power through energy exchanges. Through daily power trading the company has earned up to Rs150 crore. “Daily power trading is yet another effort to manage our surplus situation. Based on the daily demand projections, we trade excess daily availability on the energy exchanges,” said the official. The trade doesn’t pay off everyday as the rate quoted by MSEDCL could be higher than the market rate but the distributor is persistent in its effort, he said.

However, very little of the earnings has an actual impact on the profit figures of the company. Despite being in surplus, sometimes the distributor is forced to purchase power from other generators. “Although we are in surplus most times, there are variations in demand and supply during certain periods, especially if there is a breakdown. Moreover, buying power is a cheaper option for us at times,” said the official.

Although the company earned Rs 400 crore by selling excess power, it also bought power worth Rs150 crore last year. Of the remaining Rs 250 crore, only 10 percent is available for the distributor to recover its capacity charges, said the official.