A recent order by the Kerala State Electricity Regulatory Commission (KSERC) cancelling a long-term power purchase agreement of the Kerala State Electricity Board Ltd (KSEB) is likely to hurt the utility’s plans to meet Kerala’s power requirement.
The commission brought out an an order to cancel the power supply agreements between KSEB and four power generators on May 10. The order has upset the power management plans of KSEB, which is struggling to find out alternative sources.
In 2016, KSEB entered into an agreement with four private companies to purchase power at ₹4.29 per unit. The agreement stipulated purchasing 465 MW of power from these companies over a period of 25 years. As per this, the board will receive 115 MW from Jhabua Power Ltd, 150 MW from Jindal Power Ltd, 100 MW from Jhabua Power Ltd and 100 MW from Jindal India Thermal Power Ltd.
A senior KSEB official said that as per the long-term agreement, power would be available within 24 hours at the same rate from 2016 to the next 25 years. “After the commission passed the order to discontinue the contract, the generator companies immediately stopped the power distribution to KSEB. Following this, KSEB tried to purchase power from alternative sources and the rate during peak time is minimum ₹10 per unit,” said the official.
“Later the KSEB requested the generator companies to provide power for the next 75 days and they agreed to it. A sitting of the Appellate authority is scheduled for July 3. If there is no government intervention, the KSEB will have to find alternative sources to manage the power demand in the State,” said the official.
According to officials, the State manages the daily power needs through import from various long-term agreements. The power consumption in the State on Monday was 77.04 Million Units(MU). Out of 77.04 MU, 67.51 MU of power was imported from various sources.
“Due to the absence of an effective monsoon, the storage in major hydel dams is at a very low level in the State. The storage level in major hydel dams on Monday was 15% and it is capable of generating only 622.078 MU of power,” said the official.
Dejo Kappen, chairman of the Democratic Human Rights & Environment Protection Forum, who impleaded the case, however, argued that the KSEB’s allegations were baseless. “To help the private companies, the KSEB divided the 850 MW power purchase contract as two tenders at different rates. During the hearing, the KSEB had no answer about the two tenders of the power purchase and this resulted in the cancellation of these agreements,” said Mr. Kappen.
He also accused the KSEB of helping the private generator companies by turning down the power from the Central pool to the state. “The KSEB’s stance that the power rate increased in open market after the cancellation of this agreement is baseless,” added Mr Kappen.
