KVN Chakradhar Babu joined the state-owned Transmission Corporation of Andhra Prdesh (APTransco) as Joint MD last June. At the time, APTransco had about ₹40,000 crore in loans, of which ₹25,000 crore was unpaid dues to power generators. The state government was also getting flak from the power industry at the time for forcing re-negotiations of high-cost power purchase agreements, a disagreement still mired in litigation.
Babu came to this scene and saw the spot power market (buying electricity through an energy exchange) as a good opportunity to reduce power procurement costs, a move state-owned distribution companies (discoms) have been reluctant to make. He brought a chartered accountant, a statistician and power system engineers to his team, assessed the state’s power requirements, the split between thermal and renewable sources, the existing power purchase agreements (PPAs), spot power price on the exchange and created a statistical model which could forecast how best to switch between spot purchases from a power exchange and power contracts to minimise procurement costs.
