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Home KSEB Kerala State Electricity Board Limited staring At Business Attrition And Revenue Loss

Kerala State Electricity Board Limited staring At Business Attrition And Revenue Loss

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Open AccessKerala State Electricity Board Limited (KSEB), which is facing financial crunch, is now facing a new problem in the form of private players who are slowly eating into in to the state-run company’s sale’s business. A total 25 hi-tension (HT) and extra hi-tension (EHT) consumers (factories) – including BPCL’s Kochi refinery and Carborundum Universal Ltd – have started purchasing power from private firms based in other states.

The number of the firms purchasing power from private players through power exchanges (also called open access consumers) has gone up from five in 2015-16 to 15 in 2016-17 and 23 in 2017-18. “They are able to purchase power at Rs 2.5-3.5/unit from private players like Reliance and Birla groups using the daily spot purchase. At the same time, the tariff for industries in Kerala is almost Rs 4.75/unit. Open access consumers route the purchased power using KSEB’s transmission networking for which they pay 50paise as transmission charges per unit. So, the maximum cost would be around Rs 4/unit. Though the consumption by these 25 consumers together is close to 1% of the total consumption, their bill is sizable amount as tariff for industrial and commercial consumers is high,” said a top KSEB official.


“Only those firms that consume above 1MW can indulge in spot purchase. But, many small factories, especially those functioning at industrial parks, have approached Kerala State Electricity Regulatory Commission (KSERC) seeking permission to purchase power using this spot system. KSEB’s loss during 2017-18 is Rs 1,700 crore. If more HT consumers switch over, KSEB will suffer losses in future,” he said.

At present, the power generation capacity of central and state government entities is 1,30,000MW, while private firms generate 1,45,000MW. “But, private players are able to sell only a small quantity of their production. So, cost of electricity is cheaper in north Indian states where these firms are located. Even KSEB is generating less than 30% of the total requirement. KSEB purchased 70% of the required power in in the fiscal that ended on March 31, 2018. The purchase in 2016-17 was 80% due to less rainfall,” he said.

“HT and EHT consumers are purchasing power from outside during daytime when the tariff is Rs 2-3.5/unit. During peak hours, the fee charged by private players will go up to Rs 8/unit. At that time, these open access consumers will purchase power from KSEB. This means KSEB will have to purchase power from outside when tariff is high and give it to the open access consumers at Rs 5.50/unit,” he said.

KSEB said it must provide open access facility to consumers under the Electricity Act in 2003. “To help ailing industries, Centre introduced open access system and we can’t view it in terms of profit and loss. We haven’t worked out the same and we will have to obey the law. We will have to give permit for open access system if a consumer satisfies all the norms set by Centre and central electricity regulatory commission,” said NN Shaji, chief engineer (systems), state load dispatch centre, the wing that regulates open access consumers.

Source- TOI


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