Electricity Regulatory Commission rejects KSEB contracts to purchase electricity without approval

THIRUVANANTHAPURAM: The Electricity Regulatory Commission has rejected KSEB's request to approve the purchase of thermal power from private companies without permission. Back in 2014, the commission did not approve the long-term contract implemented by the UDF government without complying with the criteria. Still, electricity is being bought at a high price for about ten years.

Even though the tender was to supply electricity at Rs 3.60 per unit, a contract was signed to buy electricity at Rs 4.29 for 25 years.

The Commission has rejected power contracts for 150 MW of Jindal Power Limited, 100 MW of Jhabua Power, 100 MW of Jindal India Thermal Power and 115 MW of Jhabua Power. The action is against the guidelines of the central government and violation of tender procedures.

As per the contract, Kerala is unable to purchase all the power it is entitled to from the central grid at a low price as it is forced to buy electricity at a high price. About a thousand million units of electricity are lost every year.

At the same time, 2400 million units of electricity which could not be used in the electricity purchased from the contract companies had to be sold at a lower price.

KSEB is losing more than Rs 120 crore annually due to the continuation of the contract. A high-powered committee headed by the finance secretary had recommended the cancellation of these agreements.

The chief engineer, who is part of the team that signed the agreements, is currently a member of the State Regulatory Commission. He did not attend the regulatory commission meeting which rejected the approval for the deal.

The private company had approached the Supreme Court seeking approval of the agreements. The Supreme Court had directed the Regulatory Commission to take a decision within three months. The commission has now taken a decision based on this.

Controversial contract

1. Contracts were signed in 2014-15 to provide 865 MW electricity for KSEB at coal mining sites. From the contracts signed. Kerala State Electricity Regulatory Commission has approved the purchase of only 300 MW.

2. The Regulatory Commission has not yet sanctioned the contracts for purchase of 565 MW of power due to violation of central government norms in the procedures.