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Home KSEB BSES Kochi Pvt Ltd’s bid to extend deal with KSEB falls flat

BSES Kochi Pvt Ltd’s bid to extend deal with KSEB falls flat

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BSESBSES Kochi Pvt Ltd's (BKPL) attempts to get its power purchase deal with Kerala State Electricity Board (KSEB) extended has fallen flat; at least for the time-being.

The Kerala  state Electricity Regulatory Commission has rejected BKPL's plea on the grounds that the KSEB has reciprocated a desire to buy power from the naphtha-fuelled power plant.

After the 15-year contract ended in October 2015, BKPL - a subsidiary of Reliance Energy Ltd - had filed a petition before the commission seeking an extension. However, it could not see eye to eye with the KSEB on certain crucial issues including tariff.

Moreover, the KSEB had been dithering on this issue and it is understood that the LDF government also was not keen on pursuing the deal.

In an October 26 order, the commission said the petition submitted by BKPL was being dismissed as the KSEB had failed to submit a petition from its side indicating its readiness, the terms and conditions and mutually-agreed tariff.

Although the commission had twice extended the deadline for KSEB to furnish the details, on October 18 the KSEB had again requested an extension up to November this year.

The commission, however, noted that it was prepared to consider an extension of the power purchase agreement "as and when KSEB submits application with a proper PPA initialed by both KSEB and BKPL'' with mutually agreed tariff.

The commission's decision comes amid stiff objection on the part of the officers' and workers' unions of the KSEB against extending the deal.

Their argument is that the KSEB has been paying an exorbitant amount as fixed cost to the private plant even though power procurement has been minimal. Per-unit power costs above '11 at BKPL, when KSEB can source power from thermal-fuel stations at roughly '5.50 a unit.

The original PPA between KSEB and BKPL, which is in Udyogamandal, was signed on May 3, 1999. The contract period ended in October last year.

BKPL submitted a proposal to the KSEB in January for extending the PPA along with plans to convert the plant for dual fuel/gas operation.

The UDF government had given an in-principle approval to extend the deal, but KSEB unions argued that the power utility had paid approximately '1,490 crore between 2001 and 2015 as fixed cost - despite power procurement being minimal.

Generally, KSEB uses this plant as a standby due to the high cost of electricity.

Source- Indian Express


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