KSERC denies KSEB's request for long-term power contract approval

19 May 2023 CW Team

The Kerala State Electricity Regulatory Commission (KSERC) has rejected a series of long-term power purchase agreements totaling 465 MW that were made by the Kerala State Electricity Board (KSEB).

The KSEB had requested approval for multiple power supply agreements (PSAs) with Jhabua Power (115 MW), Jindal Power (150 MW), Jindal India Thermal Power (100 MW), and Jhabua Power (100 MW) under 25-year Design, Build, Finance, Own and Operate (DBFOO) contracts. However, in an order issued on May 10, T K Jose, Commission chairman and A J Wilson, member stated that the Commission is rejecting the KSEB's petition for final orders regarding the power drawal from the "unapproved PSAs."

The KSEB had faced criticism for various violations in the execution of these long-term purchase agreements. These violations included not adhering to the guidelines set by the Ministry of Power, deviations in the selection of bidders and power capacity, and failing to obtain prior approval from the Commission for signing power purchase agreements with the power generators.

It was highlighted that some of these deviations could have resulted in an additional liability of Rs 2.37 billion per year.

The power purchase agreements for 465 MW were part of a larger long-term procurement plan for 865 MW, for which power supply agreements were already made in 2016 and 2017.

However, the Electricity Regulatory Commission identified certain procedural deviations in the agreements. It was discovered that the KSEB had not obtained prior approval from either the Commission or the Central government for these agreements or the deviations from the guidelines. The KSEB, on the other hand, denied any wrongdoing.

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