Regulatory commission flays KSEB for not sourcing power from restored contracts

Commission asks KSEB to submit resource adequacy plan within one month to ensure 24x7 reliable power supply at the least cost. It says that if companies are unwilling to supply power as per the agreement, KSEB must take legal action

The Kerala State Electricity Regulatory Commission (KSERC) has criticised the Kerala State Electricity Board (KSEB) for failing to source electricity from the Design, Build, Finance, Own and Operate (DBFOO) contracts that were restored in December last year.

The commission declined to accept the KSEB’s explanation that the power companies under the DBFOO contracts were unwilling to supply power. If the companies were unwilling, the KSEB should initiate legal action against them for violation of terms, the commission headed by T. K. Jose observed in a January 19 order related to short-term power purchases for meeting additional summertime electricity demand anticipated in April and May.

“The generators cannot deny/stop the power supply according to their will and choice, and they are bound to act as per the power supply agreement signed with the KSEB,” the order said.

The commission noted that although the DBFOO contracts were restored in December, the KSEB had not included the availability of 315 MW from these “approved sources” in an analysis of the power situation submitted to the commission.

25-year agreements

The 25-year power supply agreements on DBFOO mode with Jhabua Power Ltd., Jindal Power Ltd., and Jindal India Thermal Power Ltd. were at the centre of a controversy last year after the commission, in May 2023, declined to approve them citing procedural lapses. Nonetheless, the commission had allowed the KSEB to schedule power from them till alternative arrangements were made. Later, following government intervention, the commission had approved the contracts in December.

In its latest order, the commission observed that the although it had denied approval in May, it had never directed the KSEB to stop scheduling power from the DBFOO contracts.

Several reminders

Through the January 19 order, the commission has allowed the KSEB to procure 250 MW through the Discovery of Efficient Electricity Price (DEEP) portal to meet part of the the summer demand. At the same time, it slammed the KSEB for failing to properly plan power generation and purchases so that the State’s electricity demand is met at the lowest price.

The commission has directed the KSEB to submit a resource adequacy plan as required under the Electricity (Amendment) Rules, 2022, within one month “to ensure 24x7 reliable power to its consumers at least cost.” The KSEB has failed to submit the plan despite several reminders, the commission noted. This plan needs to be updated once every six months.