| Work Detail |
A petition was filed by the Brihanmumbai Electric Supply and Transport Undertaking (BEST) for the approval of a Power Purchase Agreement (PPA) and the adoption of a tariff for procuring 125 MW of power for a medium-term period of seven years. BEST sought approval to secure the power through competitive bidding, a process in which multiple companies were evaluated based on their pricing and the reliability of the power supply. The power procurement was necessary due to the impending expiration of agreements with two existing power suppliers. BEST had initially evaluated the demand for power in the coming years and forecasted the base load and peak load for each fiscal year. Recognizing the limitations of renewable energy sources due to their intermittent nature, BEST aimed to ensure a continuous and reliable supply of power for its consumers. During the bidding process, several companies submitted their proposals, with the tariff rates ranging from ?5.56/kWh to ?8.26/kWh. After a detailed evaluation, one bidder emerged as the most competitive, offering 125 MW of power at ?5.56/kWh. The negotiations further reduced the final tariff to ?5.60/kWh for the initial five years. The bid was considered more favorable than the alternatives and the current cost of power from BEST’s existing supplier, which ranged from ?7.17/kWh to ?8.11/kWh. The commission reviewing the petition acknowledged the potential for significant cost savings with the proposed tariff, compared to the ongoing power supply agreements. Over the seven years, the replacement of the costlier existing power supply with the more affordable new agreement is expected to generate savings amounting to approximately Rs.569 crore. Transmission constraints were a concern, given that BEST needed to import power from outside the city. However, with the commissioning of a new 400 kV transmission line by Adani Energy, an additional 1,000 MW of power capacity became available for transmission into Mumbai. This development effectively resolved the issue, allowing BEST to proceed with the new agreement. The commission approved the adoption of the proposed tariff and the associated PPA for 125 MW of power from the winning bidder. BEST was also directed to take steps to replace its existing costlier power sources and continue exploring options for securing cheaper power for its consumers. |
