THIRUVANANTHAPURAM: A state government proposal to acquire the Reliance Group-owned BSES Kerala Power Ltd (BKPL) plant in Kochi has apparently hit a roadblock. Although a high-level meeting in November had decided to explore the possibility of buying the 165 MW plant, no decision has been finalised yet, largely owing to a dispute over price.The proposal for the Kerala State Electricity Board (KSEB) to buy the naphtha-fuelled plant was mooted as it was lying inactive ever since its power-purchase agreement (PPA) with the KSEB ran out in October 2015. Although a government-appointed committee held discussions with Reliance, the quoted price of Rs 56 crore - approximately 10 per cent of the original installation cost of the plant - was unacceptable to the committee, sources said.
The KSEB argues that the plant’s location in the central part of the state - Ernakulam is the load centre for Kerala - and its proximity to the industrial belt make it an ideal candidate as a standby plant in times of crisis. On the other hand, the government is wary of stirring up a hornet’s nest by buying a private power plant where the cost of generation is notoriously high, sources said.
Besides, the KSEB has already stopped scheduling power from the NTPC power plant in Kayamkulam and its own diesel power plant in Brahmapuram, Kochi, citing the high cost of power. Again, buying BKPL and converting it to a gas-based plant is a costly proposition, sources said.In November, the government had formed a committee headed by the principal secretary (power) with the KSEB CMD, directors for finance and generation of the KSEB and the KSEB deputy chief engineer (commercial and planning) as members. When contacted, KSEB CMD N S Pillai said the committee was yet to finalise a decision.
The BKPL plant began commercial power generation on October 31, 2000. Its 15-year PPA with the KSEB ended on October 31, 2015. BKPL had hit a controversy in 2015 after it approached the State Electricity Regulatory Commission seeking a renewal of its PPA with the KSEB.
The plant was originally intended to supply cheap power to the state, but a steep spike in naphtha prices over the years resulted in the power cost shooting up to Rs 12-13 per unit. Even though the KSEB had stopped scheduling power from this plant on a regular basis, it still paid a fixed deposit that ran into several crores of rupees, triggering a massive opposition to the renewal of the PPA.