HP Govt Saves Rs 6.72 Crore Annually by Optimising Power Contracts

The Himachal Pradesh government will save Rs. 6.72 crore annually by optimising the contract demand of 913 government electricity connections. The move, directed by CM Sukhu, reduces monthly demand charges from Rs 2.05 crore to Rs 1.49 crore.

Himachal Pradesh Government has achieved an annual saving of Rs. 6.72 crore by rationalising the Contract Demand (Load Capacity) of electricity connections provided to various government buildings across the state in the first phase. A total of 913 government electricity connections, covering categories such as agriculture, bulk supply, commercial supply, Jal Shakti Vibhag, large industrial supply, non-domestic non-commercial, small industrial and temporary supply, were optimised, reducing total demand charges from Rs 2.05 crore to Rs 1.49 crore per month. This will result in substantial annual savings to the State exchequer, a release said.

A Case Study in Savings

For instance, the Deen Dayal Upadhyay Hospital in Shimla had an earlier contract demand of 1350 kVA, which was subsequently reduced to 858 kVA, resulting in a savings of approximately Rs. 24 lakh per year.

Statewide Rationalisation Drive

A state government spokesperson stated that Chief Minister Sukhvinder Singh Sukhu noted that many departments were incurring higher demand charges than their actual consumption. Acting on his directions, the HP State Electricity Board Ltd. (HPSEBL) carried out an extensive exercise to realign contract demand with the actual load capacity of departmental buildings.

As per the Chief Minister's instructions, the process, normally carried out at the electrical sub-division level, was expedited under the supervision of the then Chief Secretary. A series of meetings between HPSEBL and departmental representatives resulted in a one-time, statewide review coordinated by the Chief Electrical Inspector, who compiled a list of all government consumers. The contract demand for each connection was capped at 10 per cent above the maximum recorded demand observed during the previous year, accounting for both summer and winter peaks.

A specially designed Application & Agreement (A&A) form was then jointly executed by authorised government and HPSEBL officials, enabling the IT Wing of HPSEBL to implement the revised limits. The A&A forms were finalised in June 2025, and by August, the government had already realised savings of Rs. 56 lakh in a single month due to the reduced demand charges. These savings will continue to accrue every month.

Future Commitment to Prudent Spending

The Chief Minister has lauded this initiative and reaffirmed the state government's commitment to undertake similar rationalisation exercises across other sectors to reduce unnecessary expenditure and ensure prudent financial management. (ANI)

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