The Haryana Electricity Regulatory Commission (HERC) has approved Haryana Power Purchase Centre’s (HPPC) revised proposal to procure short-term round-the-clock (RTC) power of 390 MW in June, 687 MW in July, and 200 MW in August 2026 to manage peak summer demand.

The approval comes in response to HPPC’s original petition seeking up to 1,345 MW of RTC power from May to September 2026.

Background

The petition arose from Haryana’s projected power requirement for FY 2026-2027. HPPC projected peak demand of approximately 16,454 MW based on historical trends and growth assumptions.

Even after considering tied-up sources, banking arrangements, and additional allocations, the state continued to face significant deficits during the summer months. The deficit ranged from around 1,400 MW to over 2,600 MW between June and August.

HPPC submitted that demand is heavily influenced by seasonal factors such as high temperatures and irrigation load during the paddy season. These conditions create sustained deficits across many time slots. For instance, deficit conditions were projected in 45% of time slots in June and over 50% in July.

It argued that procurement through power exchanges alone would not be sufficient. Exchange markets exhibit price volatility, often reaching the regulatory ceiling of ₹10 (~$0.106)/kWh during peak periods. In addition, bid clearance is uncertain, and required quantities are not always available.

HPPC also stated that RTC procurement ensures firm supply across all time blocks, including peak-demand hours, thereby reducing operational risk. Competitive bidding under NIT-124 was presented as a cost-effective option, with discovered tariffs broadly aligned with or lower than comparable market instruments.

During interim proceedings, the Commission raised several concerns and sought clarifications. These included variations in demand projections, a cost-benefit comparison between RTC procurement and exchange-based procurement, and the feasibility of demand-side management measures.

Intervenors also raised objections. They questioned the scale of short-term procurement, identified deficiencies in long-term planning, and highlighted that short-term purchases should account for only a small share of total demand. They also compared Haryana’s procurement with other states that relied less on short-term purchases.

HPPC submitted that the revised procurement quantum was significantly lower and justified by Haryana’s limited hydro capacity compared to states such as Punjab. It also clarified that additional allocations had already reduced procurement requirements for May and September.

Commission’s Analysis

The Commission conducted a detailed review of the demand-supply projections, the procurement strategy, and HPPC’s historical performance. It acknowledged that Haryana faces genuine seasonal deficits driven by weather conditions and agricultural demand.

However, it also noted structural issues in procurement planning. It observed that the state remains broadly power surplus for most of the year, with deficits concentrated in specific months and time slots.

The Commission examined past procurement behavior and identified inefficiencies. It noted that HPPC procured power at higher rates through competitive bidding while simultaneously selling surplus power at lower prices in the exchange market. This mismatch imposed a financial burden on consumers.

On the choice of procurement mechanism, the Commission accepted HPPC’s argument that reliance solely on power exchanges would expose the state to price volatility and supply uncertainty. It recognized that RTC contracts provide an assured supply and reduce the risk of shortages during critical periods.

At the same time, the state regulator emphasized that short-term procurement should not become a recurring substitute for long-term planning. It stressed the need for improved forecasting, better alignment of long-term power tie-ups with projected demand, and establishment of a dedicated portfolio optimization mechanism within HPPC.

According to government data published in March 2026, India’s energy consumption reached 149.56 BUs, an 1.8% year-over-year increase.

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