Regulatory commission cancels KSEB’s long-term power purchase deals 

S N Jayaprakash

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Thiruvananthapuram: The Kerala State Electricity Regulatory Commission (KSERC) has cancelled the Kerala State Electricity Board's (KSEB) long-term power purchase agreements that sought to purchase power from three private companies for 25 years.

The decision was taken by the commission comprising board chairman TK Jose and advocate AJ Wilson, who stated that the agreements were illegal and against public interest. The contracts were made during the tenure of the UDF government in 2014.

According to the commission’s findings, people will have to suffer an additional liability of Rs 5926 crore due to the violations in 25 years. The annual additional liability is Rs 237 crore.

The final decision has been made after a long legal battle over the controversial deals.

Severe crisis

The commission's decision is likely to cause a severe crisis in the KSEB. Although the legality of the deals were questioned earlier, the commission had granted a temporary approval to purchase power from the companies. With the current order, the previous approval has been cancelled too.

As per reports, KSEB will now have to find new ways to purchase 465 MW power and face legal issues for inking the agreements. The board had been procuring power as per the deal from December 2016 until now. According to the commission’s findings, the KSEB would have suffered an additional liability of around Rs 1100 crore within the last five years.

KSEB to file appeal

The KSEB is planning to file an appeal in the appellate tribunal or the supreme court against the commission’s action. However, the state government’s approval is required for the same.

The previous LDF government had maintained that the deals were illegal and there were moves to initiate a vigilance probe against Aryadan Mohammad, who was the Power Minister in the Oommen Chandy Ministry.

When the second Pinarayi government came to power, there were attempts to cancel the deals when Dr B Ashok was the KSEB chairman. Earlier, a committee chaired by the chief secretary was also appointed to investigate the deals. Although the committee recommended cancellation of the contracts, a final decision was not taken.

Meanwhile, the state government has not yet commented on the cancellation of the agreement. Earlier, the supreme court had asked the commission to issue a final order in this regard within three months.

Contracts to be cancelled

Jhabua Power Limited (150 MW in two contracts)
Jindal Power Limited (100 MW)

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