The Kerala State Electricity Regulatory Commission (KSERC) is unlikely to grant permission to a subsidiary company of Reliance Energy Limited in Kochi for striking a 10-year power purchase agreement with the Kerala State Electricity Board Limited (KSEB).
Commission sources told The Hindu here that based on an application submitted by Bombay Suburban Electricity Supply Kerala Power Limited (BKPL), a subsidiary of Reliance Energy Limited, the commission had sought a clarification from the board chairman on October 14 about the consequences of striking the 10-year agreement. KSEB has already expressed its willingness to sign a two-year agreement, but the company was insistent on extending it to 10 years and moved the commission on October 5. The commission would take a final call only after weighing the pros and cons of the deal, sources said.
The commission has asked the board whether the generation from the company was required for meeting the power requirement of the State during the next two years, especially since it has already made arrangements for drawing 1,265 MW from three other sources. The board has been told to furnish the year schedule of the power drawn from the company for its use as well as for sale outside the State. KSEB will have to furnish details of the fixed and variable charges paid to the company till date and also whether it had any obligation to extend the power purchase agreement beyond this month end.
The commission had warned the board that once the existing power purchase agreement with the companies like BKPL that depended on liquid fuel expired, it should not draw power from them unless they converted the stations to Liquefied Natural Gas or pool sufficient quantity of cheaper power from other sources. The board was told to issue notice to such developers within three months from April 30, 2013. Now, the board has to clarify whether it had issued notice to BKPL within the stipulated time, the sources said.
The board has been told to provide separate proposals on the fixed and variable charge commitments for the next two years, including lease charges, taxes and such others. The commission would take up the company's plea on Tuesday, but the board has not yet filed the clarification, the sources said.