RERC Approves 1,300 MW Power Procurement from Himachal Pradesh At INR 16.62/kWh For Rajasthan

The Rajasthan Electricity Regulatory Commission (RERC) has approved a proposal by Rajasthan Urja Vikas and IT Services Limited (RUVITL) to procure up to 1,300 MW of electricity from the Government of Himachal Pradesh to meet the state’s anticipated power demand during the Rabi season from November 2026 to February 2027. The electricity will be procured through PTC India Limited under a bilateral power purchase arrangement.

The approval follows a challenging power supply situation in Rajasthan during September 2026, when the state experienced a significant increase in electricity demand. Average power demand reached 14,518 MW, while peak demand touched 17,557 MW. Higher temperatures, humidity, inadequate rainfall and increased electricity consumption for agricultural irrigation contributed to the rise in demand.

At the same time, Rajasthan faced constraints in its domestic power generation. Extended outages at major generating stations, including Kalisindh and Kota, affected available power supply. The situation was further complicated by limited coal availability at the national level and a 12% decline in nationwide hydropower generation. RUVITL also reported difficulties in securing electricity through power exchanges, where advance bids received little or no participation and spot market prices increased significantly.

Under the approved arrangement, Rajasthan will procure day-ahead hydropower, with supply concentrated during morning and evening peak demand hours. The agreed tariff is ₹15.50 per kWh at the seller’s periphery. After including inter-state transmission system charges and transmission losses of approximately ₹1.12 per kWh, the estimated landed cost will be around ₹16.62 per kWh at the Rajasthan Rajya Vidyut Prasaran Nigam Limited (RVPNL) periphery.

The State Load Despatch Centre (SLDC) supported the proposal, highlighting the importance of securing reliable power to maintain grid stability. During September, the Northern Regional Load Despatch Centre (NRLDC) issued several emergency warnings because of excessive power drawal during low-frequency periods. The SLDC stated that advance procurement would help prevent over-drawals, reduce deviation-related penalties and avoid unplanned load shedding, particularly for agricultural consumers.

The arrangement will also provide an opportunity for Rajasthan’s generating stations to undertake essential annual maintenance and capital shutdowns that were postponed during the monsoon-related power shortage.

Although the negotiated tariff is higher than normal regulatory ceiling rates and does not follow standard competitive bidding procedures, RERC approved the procurement under Section 86(1)(b) of the Electricity Act, 2003, considering the exceptional circumstances and requirements of grid security. The Commission clarified that the approval is specific to this situation and should not be considered a precedent for future short-term power purchases.

RERC further directed that the actual electricity procured and expenditure incurred will be examined through a prudence check during the FY 2026–27 true-up process. It also asked state utilities to explore cheaper power sources, accelerate Battery Energy Storage System (BESS) installations, develop firm and dispatchable renewable energy projects and strengthen demand-side management to address future power shortages.