Thiruvananthapuram: Three long-term power purchase agreements entered into by the Kerala State Electricity Board (KSEB) during M Shivasankar's tenure as its chairman is likely to cause huge liabilities for the state power utility.
Power purchase agreement or PPA is a contract between the buyer and seller of electricity, the latter often being power generation utilities.
Three of the seven power purchase agreements for 30 years do not have the approval of the regulatory commission. The board will incur an additional liability of Rs 427 crore per year by purchasing power without sanction.
During Sivasankar's tenure, the board entered into agreements on purchasing 865MW power. The first agreement was for buying 200MW from Jindal Power at a rate of Rs 3.60 per unit for 30 years from 2015.
Then agreements were made on purchasing 115MW from Jhabua Power at a rate of Rs 4.15 per unit. And also to purchase 100MW for Rs 4.29 from Bharat Aluminium Company Ltd (Balco). These were approved by the regulatory commission.
All the subsequent agreements had a rate of Rs 4.29. They include the purchase of 100MW from Jindal India Thermal Ltd, and 100MW from the Jhabua in the second phase, and 150MW from Jindal Power.
Though an agreement was signed with the East Coast Power for 100MW, that got cancelled.
As the additional liability does not count as expenses of the board, it is not considered when the rates are revised. The Centre had instructed that the state government and regulatory commission should jointly resolve the issue.
Former Principal Secretary to the CM, Sivasankar was recently suspended over his alleged association with the accused in the sensational gold smuggling case being probed by several Indian agencies including the NIA.
