Analysis | Did Satheesan present misleading power purchase figures to justify Rajamanickam's removal as KSEB chairman

Chief Minister V D Satheesan's post-Cabinet briefing on Wednesday confirmed a suspicion that had taken root right after the shake-up of the civil services on November 2. Differences over the purchase of power from outside sources had indeed resulted in the removal of M D Rajamanickam as KSEB chairman.

The Chief Minister said that his government had decided to purchase 500MW round-the-clock (RTC) power from GNA (General Network Access) Energy Private Limited till March 31, 2027. Rajamanickam had preferred sourcing power from Himachal Pradesh State Electricity Board Limited (HPSEBL).

While power from HPSEBL was priced at ₹14.50 per unit (negotiated down to ₹12.50), GNA power cost ₹8.63 per unit. The Chief Minister said that there was a ₹5-6 per unit difference between the two sources, and added that if the HPSEBL power was chosen it would have caused the state government an additional burden of ₹2232 crore. "How can you expect me to take a decision that will impose such a huge financial burden on the state," the CM said.

This was a straightforward 'on the face of it' comparative analysis of the power purchase costs. KSEB under Rajamanickam, on the other hand, had a more granular assessment of the comparative power costs.

The KSEB chief engineer (commercial and tariff), in a note sent to Rajamanickam when he was KSEB chairman, says that though the HPSEBL price was relatively higher, the offer "provides substantially higher capacity during evening peak hours".

Meaning, most of the power supplied by HPSEBL will be made available during the peak hours (6.30pm to 12 midnight), a period when power consumption in Keralam shoots up. The GNA supply, on the contrary, will be distributed equally during the entire day.

"Fact is, we don't want power during the non-peak solar hours (8am to 5pm). We are already in surplus during the day, particularly because of solar generation. So the GNA power we receive during solar hours is useless. We pay nearly ₹9 for nothing," a top KSEB official told Onmanorama. This surplus power, which Keralam purchases for nearly ₹9 per unit, can be sold in the open market but not for more than ₹2.50 per unit.

The Chief Minister, however, claimed that GNA would supply more power during peak hours than HPSEBL. "From Himachal Pradesh we get 843 million units (MU) (KSEB says it is 884 MU). But GNA will supply 1812 MU," the CM said.

At the surface level, this is factual. But it does not mean that GNA will offer 1812 MU during peak hours. What it actually means is that the power from GNA (1812 MU) will be distributed equally through the day, without taking into consideration the power requirements of various time-slots in a day.

The HPSEBL supply works differently. Even if the power contracted from HPSEBL is comparatively lesser (884MU), most of it will be supplied during the peak hours.

In connection with peak-hour supply, the CM made another suspect claim. If HPSEBL supplied 353MU during peak hours, he said GNA offered 453MU during the same high-demand period. "A difference of 100MU," Satheesan said.

This is misleading. In November, for instance, the total supply would be 360MU. (December - 372 MU, January - 372 MU, February (28 days) - 336 MU, and March - 372 MU. Total - 1812 MU). Again, this is not exclusively for peak hours but for non-peak solar hours, too.

Evidently, there is not a single month, between November and March, in which GNA will supply 453MU as the CM claimed.

HPSEBL, too, has not offered 353MU a month as Satheesan said. The maximum it has offered is 264.7MU in November. (December - 185 MU, January - 141 MU, February - 119.8 MU, and March - 173.1 MU. Total - 884.1 MU). The advantage over GNA is, the supply will be mostly for peak hours.

At the basic level, GNA would supply 12MU a day. Since this power has to be equally distributed through the entire day, peak hours will not get more than 3MU a day.

HPSEBL's daily supply would work out to 5.58MU to 7.53MU a day. However, 4.5MU to nearly 7MU will be slotted daily for peak hours alone.

KSEB had also spoken of a cost advantage in choosing HPSEBL. Since the power purchased is lesser (884MU as compared to 1812from GNA), the total cost of power purchase from HPSEBL will be lower though the per unit cost is higher. Even if it costs ₹14.50 per unit, the HPSEBL bill would be ₹1281 crore, lower than GNA's proposed bill of ₹1566 crore (at ₹8.63 per unit for 1812 MU).

There is another factor that the CM failed to mention. The GNA power will provide only 500MW capacity during peak hours. In contrast, HPSEBL provides peak hour support ranging from 864MW to 1,280MW during November 2026 to March 2027. This is further indication that most of HPSEBL's daily supply would be scheduled for peak hours.

Top KSEB officials are worried that if GNA is chosen, it would result in a peak-hour shortage.