Despite high cost, KSEB allowed to purchase 177 MW from NTPC for three more years

Kerala State Electricity Board has been accorded sanction to continue its purchase of 177 MW from two National Thermal Power Corporation (NTPC) thermal plants for nearly three years till April 30, 2029; 80 MW from Barh-Stage-I and 97 MW from Barh-Stage-II.

KSEB has been purchasing power from these stations on a short-term basis since October 1, 2024. Nonetheless, while granting its approval on Thursday, the Kerala State Electricity Regulatory Commission expressed its concern about the cost of purchase.

"Commission has examined the average tariff of the Barh-Stage-I and Stage-II stations basis with the average tariff of the RTC (round the clock) power discovered through DEEP (Discovery of Efficient Electricity Price) portal and short-term market. The rate of electricity from the above stations, especially the fixed cost of Barh-I station, is slightly on the higher side," the KSERC said in its order on Thursday.

Even though the tariffs have been fixed by the Central Electricity Regulatory Commission (CERC), the KSERC does not want the KSEB to submissively accept it. "The KSEB should actively participate in the tariff determination process, including hearings initiated by CERC, and shall take all efforts to get the tariff determined by CERC reduced," it said.

The average tariff of the electricity from Barh-1 station for the year 2025-26 is ₹5.60 per unit, and this includes a fixed charge ₹2.68 and energy charge ₹2.91. It is this fixed charge that the KSERC had termed as "slightly on the higher side". Similarly, the average tariff of the electricity from Barh-II station is ₹4.67 a unit, which includes a fixed charge of ₹1.97 and energy charge of ₹2.89.

It was the current power crisis that caused the KSERC to allow KSEB to continue the purchase without any conditions. "Considering the severe power shortage prevailing in the State, and also considering the anticipated shortage of electricity in the Non-solar hours in the coming years, KSEBL may require the electricity from the Barh- Stage-I and Stage-II stations of NTPC Ltd," the Commission said.

KSEB, too, had submitted that Kerala was facing severe power shortages during peak hours and night off-peak hours due to the failure of monsoon, increase in demand and other factors. "In such circumstances, the availability of firm power from these two plants is vital to maintain grid stability, ensure resource adequacy and enable KSEB to provide uninterrupted electricity supply to consumers," a top KSEB source said.

In addition to this, the Centre has assured Kerala that the additional allocation of 150 MW from the central pool will continue. The additional supply, which began on September 14, was originally scheduled for only a month. Meaning, it would have ended on October 15.