Thiruvananthapuram: Chief Minister VD Satheesan has defended the government's decision to purchase electricity from private power trading company General Network Access (GNA), saying the alternative offer from Himachal Pradesh would have imposed an additional financial burden of around ₹2,233 crore on Keralam.

The Chief Minister said the government had examined two proposals before taking a decision. Himachal Pradesh had offered electricity at ₹14.50 per unit through Power Trading Corporation (PTC), while GNA quoted rates of ₹8.63 and ₹8.90 per unit.

“The Electricity Board's report made it clear that the Himachal Pradesh offer was not a direct government-to-government transaction, but was routed through PTC, which would charge a trading margin,” the Chief Minister said.

“When electricity is available at ₹8.63 and ₹8.90 per unit, why should the government buy it at ₹14.50 simply because the offer is from a government?” Satheesan asked, adding that approving the more expensive proposal would have been irresponsible.

According to the Chief Minister, the Himachal Pradesh proposal would have resulted in an additional expenditure of ₹722.91 crore between October and December and ₹1,510.43 crore up to May, taking the total to approximately ₹2,233 crore.

The government had also compared the quantity of electricity available under the two proposals and the supply during peak hours. While the Himachal Pradesh offer covered 843 million units, GNA offered 1,812 million units until the end of March.

During peak hours, between 6 pm and midnight, the Himachal Pradesh proposal would provide around 353 MW, compared with 453 MW from GNA. The latter would therefore supply nearly 100 MW more during the period of highest demand.

The additional burden over the regulatory ceiling during peak hours would be around ₹2.60 per unit under the GNA arrangement, against approximately ₹8.50 per unit under the Himachal Pradesh proposal, the Chief Minister said.

He said the Electricity Minister had forwarded the file to him as the Board wanted the government to take a decision. The responsibility for approving the proposal rested with him.

The Chief Minister also countered the Opposition's criticism by pointing out that the previous government had purchased electricity through the same GNA platform in 2025. Power had also been procured from private companies such as Jindal, Adani, Tata Power, Greenko Energies and Shree Cements during the previous government's tenure. The Kerala State Electricity Board had been sourcing a substantial share of its power from private companies for years, he said.

Govt explores cheaper power sources
Satheesan said the government continued to explore options to procure electricity at lower rates but failed to secure the required quantity at suitable prices, even after inviting tenders.

The state is hoping to procure nearly 1,000 MW from NTPC's Sinnar project at around ₹5.18 per unit from April. The Chief Minister said he had met the NTPC chairman in Delhi and received an offer at that rate.

The government is also pursuing long-term power purchase agreements and battery storage facilities to support renewable energy generation. Discussions with NTPC and other public sector entities are at an advanced stage, and the state hopes to generate 5,000 to 6,000 MW within the next two to three years, he said.

Steps to manage power shortage
The Chief Minister said the government had taken several measures to meet the immediate demand for electricity. The state received 150 MW from the Nuclear Power Corporation at ₹4.65 per unit during the past two months. A 150 MW generator belonging to the Electricity Board, which had been shut down for scheduled maintenance, was also restored ahead of schedule. The state also managed an additional requirement of around 650 MW through a combination of sources, including the nuclear power supply and private suppliers.

Satheesan attributed the pressure on the power sector partly to increased consumption and the need to return 500 MW received through a power swap arrangement during June and July. The state had expected higher domestic generation during those months, but inadequate rainfall affected production. Electricity consumption in September was nearly 1,000 MW higher than in the corresponding period last year.

"Power swap arrangements are common, and the state might enter into similar agreements for June and July next year. However, entering into such an arrangement during an El Niño year, when rainfall was uncertain, had not been a wise decision. The government had to manage these challenges while ensuring uninterrupted power supply," the Chief Minister said.