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  1. Rising power costs may trip Kerala State Electricity Board’s electrification aim

Rising power costs may trip Kerala State Electricity Board’s electrification aim

Even as Kerala is readying to be India’s first fully electrified state, increased power purchases driving up the debt of the state’s power utility, Kerala State Electricity Board.

By: | Thiruvananthapuram | Published: February 8, 2017 6:54 AM
ksb The board, which produces only about one-seventh of its power requirements, relies on buying from firms like Maithon Power Corporation, Damodar Valley Corporation and Jhabua Power. (Reuters)

Even as Kerala is readying to be India’s first fully electrified state, increased power purchases driving up the debt of the state’s power utility, Kerala State Electricity Board. The board, which produces only about one-seventh of its power requirements, relies on buying from firms like Maithon Power Corporation, Damodar Valley Corporation and Jhabua Power.

KSEB currently bears debt to the tune of R6,900 crore. To surmount the higher power demand in the summer, the board would have to resort to higher power purchases, at a higher price. What is worrying is that from R4 per unit at present, the purchasing cost is poised to nearly double to R7 per unit in the coming months, on higher demand. With a monthly revenue shortfall of R80 crore, the board has been pushed to go further loans and worse, its bankers are not enthused.

Board officials, when contacted, expressed concern that the power demand could leapfrog to 85 million units per day, from the present 65 million units per day. Hydel power, which was KSEB’s forte, would have been low cost. According to NS Pillai, director (finance), KSEB, since the drought context necessitates water conservation, the board has kept hydel power generation to a minimum.

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On an average, the KSEB currently produces only 9 million units of hydel power per day. Kerala gets just 30 million units from the central pool. For the rest, the board will have to depend on private power purchases at higher costs. “National Thermal Power Corporation’s Kayamkulam plant has not stood
KSEB in good stead at the time of need. Buying power from NTPC at exorbitant cost is out of the question now,” state electricity minister MM Mani told FE.

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