Some areas in Eastern and Western India have electricity prices dropping below Re 1

While on one side, citizens from major parts of the country are suffering because of mighty electricity bills, there are some areas with excess power generation, where electricity prices at power trading exchanges have dropped below Rs 1 for off-peak demand periods.

In some areas like these, prices have dipped to 50 paise per unit, with others having electricity at around 80 paise per unit. These rates are about 20% down from last year.

This has happened because of the combined effect of demand growth, which was less than what was expected, excess coal at thermal power plants, as well as the restrictions that were imposed by the National Load Despatch Centre on long-distance power transmission given the wintry conditions, as per the executives of India Energy Exchange.

While consumers could see a reduction in their bills, not many utilities are taking advantage of the price drop as much as they can.

"A large number of power utilities are not active in participating in power trading even when prices dip to such low levels," a senior power sector official told ET. "They seem to be happy buying power from the generators with which they have signed power purchase agreements even if the price at which they are buying the power is higher than exchange prices."

As per the recent trend, power generation in west and east India has had its prices dipped; these areas have surplus electricity as compared to rest of the country.

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