The Kerala State Electricity Board Ltd. (KSEB) currently carries a debt burden of nearly ₹11,000 crore.
While Electricity Minister K. Krishnankutty attributed the growing debt to additional expenses incurred due to the shortfall in rain, the Opposition blamed the government for pushing the company into an unprecedented financial crisis through its decision to cancel a long-term power purchase agreement signed by the Oommen Chandy government.
The bleak scenario of the State’s power utility was taken up for discussion during the Question Hour in the Assembly on Tuesday when Mr. Krishnankutty revealed that the KSEB has incurred additional expenses amounting to ₹1,180 crore during the current fiscal alone. “The monsoon deficit last year, coupled with the fall in domestic power generation and increased consumption, had necessitated the purchase of power at high rates, thereby increasing the company’s losses. The company had to enter into short-term power contracts and also purchase electricity through the power exchange to meet the demand,” he said.
He said the need for advance payment for purchases made through the power exchange has put the KSEB’s financial management under severe stress. The company has been paying approximately ₹5 crore a day to the power exchange.
Worsening its financial health is the long-pending dues of ₹3,347.43 crore owed to the board. The arrears owed by the Kerala Water Authority, a total of ₹2,479 crore, has been accruing by ₹37 crore every month.
Higher rate
Leader of Opposition V.D. Satheesan faulted the Left Democratic Front (LDF) government for the Kerala State Electricity Regulatory Commission cancelling the power contracts. While the scrapped contracts ensured power supply at ₹4.29 a unit, the KSEB now purchased power at an exorbitant rate of around ₹9 a unit, he alleged.
The allegations were countered by Chief Minister Pinarayi Vijayan who maintained that the government could not be blamed for the setback. The commission had ordered the cancellation of the contracts in view of certain procedural deviations during their signing in 2014.
