THIRUVANANTHAPURAM: Delhi's Appellate Electricity Tribunal dismissed KSEB's plea seeking a stay on the State Electricity Regulatory Commission's order canceling a controversial power purchase agreement. The tribunal minding the current developments found no convincing reasons to impede the commission's decision. Justice Ramesh Ranganathan and member Sandesh Kumar Sharma clarified the same.

The tribunal has allowed KSEB to submit arguments regarding the decision within the 28th of August. The appellate tribunal decision comes as a blow for KSEB, as the board was hopeful of maintaining long-term contracts with private players. It was during the UDF era in 2014 that the contract was signed with three private companies to purchase electricity for 25 long years. With the current decision, the power purchase of 250 MW from Jindar Power Limited and 215 MW from Jhabua Power Limited stays canceled.

The regulatory commission came with an order on May 18 stating that the contract was illegal and against the public interest. With the banning of all such contracts, the regulatory commission has now allowed KSEB to purchase electricity from outside players. KSEB needs to splash big money amidst an economic shortfall. Short-term contracts are allowed and the board looks to engage in contracts with companies like Adani Power, Adhunik Power Limited, Nava Bharat, Jindal, and Maa Durga Thermal Power.

The contract will see KSEB purchasing electricity at Rs 5.15 to Rs 6.34 per unit, until next May. The move is expected to push the board further into the swamp of debt. The average selling price of electricity in the state is less than Rs 6. The excess cost will have to be recovered from consumers through cess.