The Railways is expected to see cost reduction of about ₹ 440 crore this fiscal in its electricity bill – courtesy “open access” provided by Haryana and lower tariffs agreed by Chhattisgarh and Andhra Pradesh.

In Haryana, through “open access”, Railways expect to lower cost by ₹40 crore in the present fiscal.

In Chhattisgrah and Andhra Pradesh, the Railways has been able to work out a tariff of ₹4.99 a unit and ₹4.74 respectively, according to an official source.

Against a business as usual approach, when the tariffs were going up by about 4 per cent every year till 2014-15, the Railways have seen a drop in tariffs since 2015-16.

In 2015-16, the Railways paid an electricity bill of ₹11,000 crore, which dropped to ₹9,000 crore 2016-17.

The average per unit cost for power procured by the Railways dropped to ₹6 in 2015-16 against ₹6.75 in 2016-17.

Cost of electrical energy procured by Indian Railways for its traction applications have increased at a compounded annual growth rate of 7 per cent between 1987 and 2015, the Railways has stated in its electricity management directorate.

The increase between 2006-2015 was high due to cross subsidy burden and increasing distribution and transmission losses of distribution companies that were passed on to the Railways by charging higher tariff for traction energy.

The per unit cost of energy for electric traction was ₹6.8 (2014-15), ₹6.49 (2013-14), ₹6.15 (2012-13), and ₹5.3 (2011-12). Railways consumed 18.25 billion units of electrical energy for its traction and non-traction applications in 2014-15, which is about 1.8 per cent of total electricity generated in the country.

The Railways has saved costs of ₹2,000 crore in 2017-18, said the official.

The Ministry, in its report, said that through REMCL, it has tied up about 585 MW for consumption in Odisha, Bihar, UP, Punjab, Haryana, Delhi, Rajasthan, and Chhattisgarh at an average rate of around ₹4 a unit at the consumption point.

Additionally, about 400 MW has been tied up at an average rate of about ₹5 a unit for consumption in Andhra Pardesh, Tamil Nadu, Kerala, Telangana Karnataka, according to the Electrical Energy Management Directorate.