Kerala Opposition cautions the government against hiking power tariff
Mr Satheeshan accused the Chief Minister’s Office of pulling strings to annul the 2014 power purchase agreement to help private suppliers renegotiate a deal to the latter’s pecuniary advantage.
Kerala Opposition leader V.D. Satheeshan blames LDF government’s decision to scrap 2004 power agreement as the reason behind KSEB’s losses.
| Photo Credit: The Hindu
Leader of the Opposition V.D. Satheeshan has cautioned the government against burdening the public by increasing the power tariff for domestic consumers.
Calling the situation a self inflecting loss, Mr Satheeshan blamed the LDF government’s decision to annul the advantageous power purchase agreement authored by the Oommen Chandy government in 2014, which he claimed incurred severe losses to the Kerala State Electricity Board (KSEB).
As per Chandy government’s agreement, the state would purchase power at ₹4.29 a unit for 25 years. The State benefitted from the agreement for nine years till the Pinarayi Vijayan government voided the contract without assigning any reason in 2023.
The “out-of-the-blue” decision caused the State to purchase power at a higher and barely affordable tariff, ranging between ₹8 and ₹12 per unit, Mr. Satheeshan said, adding the KSEB suffers a loss of an estimated ₹15 crore per day. So far, the cancellation of the 2014 agreement has cost the public exchequer an estimated ₹2000 crores, he claimed.
Mr Satheeshan said the government had hiked power tariffs twice in 2024 in a weak bid to tide over the self-inflicted loss.
Soaring electricity charges, unchecked seller inflation, and the government’s failed market intervention policies have worsened the cost of living crisis. A chastened government belatedly hastened to restore the 2014 agreement in the face of public outrage.
Consequently, the government, which had painted itself into a corner, attempted to strike a new agreement with power suppliers. The Adani Group has reportedly promised to supply the KSEB electricity at ₹6.8 per unit.
Mr Satheeshan accused the Chief Minister’s Office of pulling strings to annul the 2014 power purchase agreement to help private suppliers renegotiate a deal to the latter’s pecuniary advantage.
He said the government could not seek political cover by blaming the Kerala State Electricity Regulatory Commission for the “self-defeating” decision.
Mr Satheesan noted that the Commission members were fellow travellers of the Left Democratic Front (LDF). Notably, one commission member had served on the personal staff of former electricity minister M M Mani, MLA. “They would only do the government’s bidding”, he added.
Mr Satheeshan asked whether the Commission was above the government. “If so, why did the regulatory commission approach the power companies to restore the advantageous 2014 agreement at the government’s instance?”, he asked.
Mr Satheesan said the opposition would hold the government accountable for the decision to accord undue pecuniary advantage to private power supplies at the cost of the public purse. “The public wants to know who is responsible for the anti-State decision. The UDF would fight on their side and make the government answer”, Mr Satheeshan added.
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