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One way to insulate consumers from hefty electricity bills is for State distribution companies to buy power at lower rates.
In an interview to Business Line , Jyotiraditya Madhavrao Scindia, Minister of State (Independent Charge) for Power, said this can be achieved if discoms enter into long-term power purchase agreements (PPAs).
If States such as Tamil Nadu, which are power deficit, go for long-term PPAs, volatility will be kept under check. Also, this will bring tariffs down, he added.
While producers mostly prefer long-term agreements, States find it difficult to secure them because of the bad financial health of their discoms.
Scindia said another issue is that of transmission capacity. Citing the example of Chattisgarh, the Minister said there were a lot of power plants in the State, but it did not have enough transmission capacity.
Read interview with Scindia: >‘High power tariffs should be the last resort’
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