CPPA-G seeks higher power purchase price for 2027

“CPPA-G has sought an average power purchase price of Rs27.309 per unit for 2027, about 8% above the level approved for 2026.”

— Editorial Team

Key points

CPPA-G has sought an average power purchase price of Rs27.309 per unit for 2027, about 8% above the level approved for 2026.
The proposal remains subject to regulatory review and does not itself set the final consumer electricity tariff.

Business|By Editorial Team|Published 04-Nov-26|Latest update 11/4/2026, 5:53:10 AM|2 min read

The Central Power Purchasing Agency-Guaranteed has sought an increase of about 8% in the average power purchase price for distribution companies in calendar year 2027. The proposed base-case price is Rs27.309 per kilowatt-hour, compared with Rs25.320 per unit approved for 2026.

The proposal was examined at a public hearing held by the National Electric Power Regulatory Authority. The review is part of the process that will help determine reference costs for consumer-end electricity tariffs from January 1, 2027.

Under the base-case projection, total power purchase costs are estimated at Rs3.552 trillion against projected electricity sales of 130,081 gigawatt-hours. The calculation assumes demand growth of 2.6% and no load management.

The agency presented six possible scenarios, reflecting uncertainty around international fuel prices, fuel availability, exchange-rate movements and future fuel-cost adjustments. The figures are forecasts for the power purchase price and should not be treated as a final retail tariff for consumers.

In the most favourable scenario, the projected power purchase price is Rs25.883 per unit. Two higher-cost scenarios put the estimate at Rs28.835 and Rs29.255 per unit, largely because of increased fuel costs, variable operating expenses and capacity charges.

Capacity payments remain one of the largest components of the projected cost. In the base case, fuel costs are estimated at Rs1.32 trillion, while capacity charges account for a much larger portion of the overall electricity procurement bill.

The regulatory hearing also raised questions about LNG supply assumptions, the rupee-dollar exchange rate, Brent crude oil prices and differences in electricity-demand projections submitted by sector entities. These inputs can materially affect the final cost calculation.

The regulator will now assess the proposal and stakeholder feedback before issuing a determination. Any eventual impact on household and business bills will depend on the final approved tariff, as well as taxes, subsidies, duties and other applicable adjustments.