KOCHI: Offering a huge relief to the Kerala Water Authority (KWA), the state government has taken over its power dues to the tune of Rs 2,068.07 crore. The government order issued by Additional Chief Secretary K R Jyothilal on Tuesday said KWA’s pending dues will be released in 10 annual instalments of Rs 206.80 crore each to compensate for the loss sustained on account of the write-off of the utility’s electricity charges from 2024-25. The government will recoup the amount of Rs 2,068 crore from the non-plan grant for KWA in instalments.
At the same time, the cash-strapped Kerala State Electricity Board (KSEB) is unhappy with the decision. The board was expecting a finance department decision to adjust the amount from the electricity duty — 15 paise per unit — collected from the customers alongside the power charges. With the demand for power anticipated to rise by 500MW in April and by 600MW in May, the KSEB has to make advance payment to purchase power.
“There is nothing exciting in the order,” a top officer with the board told TNIE.
“The government will pay the dues in 10 annual instalments. But the KWA is currently paying only Rs 10 crore per month against the monthly power bill of Rs 37 crore. KWA’s annual power bill comes to Rs 444 crore, of which they pay only Rs 120 crore. So they are adding Rs 324 crore to the arrears every year, which means the power dues will continue to grow.”
The officer said the KSEB is facing acute fund crunch and needs immediate funds to purchase power for the next two months.
Welcoming the government decision, Water Resources Minister Roshy Augustine expressed hope the finance department will make similar arrangements to recover the water charge arrears from various departments.
“The decision to take over the power arrears is a huge relief. Recovering the amount from the non-plan grant to the water authority will not have any adverse impact as the government will provide support with additional funds in case of difficulty,” the minister said.
On Thursday, Chief Minister Pinarayi Vijayan is scheduled to chair a meeting to discuss the power crisis and the measures required to ensure the availability of power during the next two months. The KSEB is hoping that the chief minister will intervene to provide advance funds for short-term purchase of power.
With the general elections set to be held this summer, all states will be purchasing power aggressively to ensure uninterrupted supply. Summer will be peaking in north Indian states by the end of March and there will be a scarcity of power in the realtime market in April and May. The arrangements made by KSEB will suffice to tide over the demand only till the end of March, sources said.
KSEB’s decision to purchase power from the realtime market to avoid load-shedding during peak hours has added to its burden as the power utility has to ensure cash flow of Rs 8-10 crore daily for power purchase.
While the KSEB has conserved water in dams to ensure power generation till June 15, a deficient pre-monsoon rain or a delay in the onset of monsoon can upset the board’s calculations. The decision of the electricity regulatory authority to cancel the long-term agreement with three private companies to purchase power at Rs 4.29 per unit has adversely impacted the KSEB as it is forced to purchase power from the realtime market at Rs 9.5 to Rs 10 per unit.
darkness looms large
Rs 37 crore KWA’s monthly power bill
KWA paying only Rs 10 crore per month
KWA’s power arrears to grow by Rs 324 crore per year
CM to chair meeting to discuss crisis
KSEB to repay the amount in 10 annual instalments of Rs 206.80 crore each
KSEB anticipates power shortage of 500MW in April and 600MW in May
KSEB needs funds to make advance payment for power purchase
Demand spikes in power exchange as states aggressively purchasing power in view of the coming Lok Sabha elections