Thiruvananthapuram: An official panel has found that the agreement entered into by the Kerala State Electricity Board (KSEB) to purchase power from private companies for a period of 25 years without the consent of the State Electricity Regulatory Commission has resulted in an additional liability of Rs 15,000 crore for the Board.
Based on the findings, the committee headed by the State Finance Secretary recommended revoking of such an agreement.
The action was initiated on the basis of the letter given by Power Secretary and KSEB Chairman B Ashok to the State Chief Secretary, requesting him to take an immediate decision on the recommendation given by the Union Power Ministry to cancel the agreement.
The KSEB Chairman pointed out in his letter that the Board has been procuring 565 megawatt of power from three companies without any legal backing since August 30, 2016.
The letter also warned that the KSEB might land up in a sudden liability of Rs 500 crore in case the final court verdict went against it. The dispute over issues such as fixed charges might also cause more financial liabilities for the KSEB.
During the time of the UDF ministry, a total of seven agreements were prepared to purchase power from outside. At first, the Regulatory Commission approved the proposal to purchase power for Rs 3.60 per unit.
But during the previous Pinarayi Vijayan Ministry when M M Mani was the Electricity Minister, an agreement was entered into by the KSEB as per which the sanction was accorded to buy 200 megawatt of power from India Thermal Power Company and 150 megawatt of power from Jhabua Power Limited at a rate of Rs 4.29.
The decision was taken overruling the objections raised by the Regulatory Authority. The CAG report had also found fault with the agreement.
The Regulatory Commission denied the permission, citing exorbitant rates for power to be quoted by these companies. It is estimated that every year, the KSEB is set to incur a loss of Rs 600 crore due to payment of higher price to these companies.
