Thiruvananthapuram: KSEB finds itself in hot spot due to a power purchase agreement entered in haste during the summer months, without proper planning or approval from the Regulatory Commission. KSEB reportedly will lose approximately Rs 4 crores per day, totaling Rs 200 crores by the end of the contract. Consumers will bear the burden of this liability through increased electricity bills.

The agreement, which commenced on May 12, involved KSEB purchasing one crore units daily at a rate of Rs 9.60 per unit, amounting to an expenditure of Rs 10 crores per day. Despite decrease in consumption due to the rains this week, KSEB is obligated to procure electricity at high price until June 30. Because of this, approximately 50 lakh units from Central stations, which were previously obtained at lower rates of Rs 4.5 to Rs 5, remain unused and thus surrendered. This has resulted in a daily loss of Rs 4 crores due to fixed charges incurred whether the electricity is utilised or not.

KSEB failed to anticipate the heightened summer demand, escalated by heatwaves, which necessitated an additional three crore units daily. Responding to the crisis, KSEB hastily entered into an agreement to purchase electricity from the emergency market at Rs 9.60 per unit, which becomes Rs 10 per unit upon reaching Kerala. The customary practice of procuring from the emergency market only when absolutely necessary due to the associated high costs was overlooked by the board. Surprisingly, this agreement extends until June 30, despite the foreseen onset of monsoon rains in June.

The agreement was made with verbal approval from the government, bypassing the mandatory communication to the Regulatory Commission. According to protocol, power purchase agreements, especially those made without prior authorization during emergencies, should be immediately reported to the Commission for approval. However, the Commission has not yet been officially informed of the same.