Kerala heading towards power crisis: Will not be able to provide electricity even if contract is restored says companies

THIRUVANANTHAPURAM: A huge power crisis and the resulting financial burden await the state. The companies are of the position that even if the electricity contract is reinstated, they are not interested in continuing to provide electricity at the same rate. With this, the possibility of getting 465 MW of electricity per day has gone dark. KSEB has informed the Electricity Regulatory Commission that an additional liability of Rs 203 crore has been incurred till yesterday to resolve the electricity crisis since May. The loss for one year is Rs 498 crore. The consumers will have to bear the liability of this in the form of a rate hike next year. To avoid the crisis, the only option before KSEB is to negotiate with the companies and ask them to reduce the prices.

KSEB had bought 465 MW of electricity from four companies outside Kerala for a long time. The contract signed by the UDF government in 2015 was cancelled by the Electricity Regulatory Commission citing problems in the tender process. To avoid the electricity crisis, the government instructed the commission to restore the contract as per Rule 108 of the Central Electricity Act in 2003. According to this, the State Regulatory Commission started proceedings on Friday and took evidence. On behalf of the state government, the Principal Secretary of the Energy Department KR Jyothilal approached the commission and demanded that the contract be restored. In this meeting, the companies informed that even if the contract is reinstated, they will not be able to provide electricity at the contract rate. Representatives of companies such as Jindal Power Limited, Jindal Thermal Power Limited and Jhabua Power Limited took part in the evidence collection of the Regulatory Commission online. With this, the possibility of restoring the long-term contract was lost. The companies also informed that after the cancellation of the contract with Kerala, they are supplying electricity to other distribution agencies. The purchase and sale documents will be submitted to the Regulatory Commission within a week.

18 years lost

Under the 25-year long-term power contract, 465 MW of electricity was being purchased from the companies till May this year at an average of Rs 4.29 per unit. The contract was canceled when it was valid for 18 more years.

Therefore, KSEB will be forced to purchase 465 MW of electricity at a higher price. After cancelling the contract, KSEB had invited tenders for short term contract, long term contract and swap contract. Instead of 4.29 rupees, companies quoted 8 rupees. With this, further proceedings were stopped. A cold response was received despite inviting tenders on the condition of swapping electricity.