Keralam Chief Minister V.D. Satheesan’s stand comes under a cloud in power purchase row

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Keralam Chief Minister V.D. Satheesan

Chief Minister V.D. Satheesan’s stand that power purchases from Himachal Pradesh would have attracted an additional financial liability of ₹2,232 crore has come under a cloud.

While Mr. Satheesan claimed at a post-Cabinet briefing that the government had opted for purchases via GNA Energy OTA over the Himachal Pradesh offer, the Kerala State Electricity Board’s (KSEB) documents indicate otherwise. These documents show that the Chief Engineer (Commercial and Tariff) had informed the then Chairperson and Managing Director (KSEB) M.G. Rajamanickam that the Himachal Pradesh arrangement was “more suitable” for meeting the KSEB’s critical peak-hour requirements.

Also, the Himachal Pradesh offer promised a substantially higher capacity during evening peak hours and involved lower aggregate expenditure for November 2026 to March 2027. However, Mr. Satheesan had said on Wednesday that the GNA promised to supply more during the peak hours from 6 p.m. to midnight.

Of the two proposals before the KSEB, the Himachal offer, made via PTC India Ltd, was priced at ₹14.50 per unit. GNA Energy quoted two prices, ₹8.63 and ₹8.90 per unit. A comparison of the volumes on offer indicated that GNA offered to supply more during the peak hours, 6 p.m. to midnight. The Himachal Pradesh offer was for 843 million units (mu) up to March 2027, and GNA’s 1812 mu. Of this, Himachal offered a peak time supply of 353 mu, and GNA, 453 mu. Procurement from GNA entailed an additional liability of ₹2.6 per unit and that from Himachal, ₹8.5., the Chief Minister said on Wednesday.

But the KSEB documents tell a different story: GNA offered 1,812 mu at ₹8.63 per unit and the Himachal government, ₹12.50 per unit for 884.2 mu for the November- 2026-March 2027 period. In GNA’s case, the net financial outflow on the KSEB’s part would have been ₹1,396.60 crore and in Himachal Pradesh’s case, only ₹1,105.20 crore.

But opting for the GNA supply would also entail an additional peak-hour shortage ranging from 364 MW to 780 MW during November 2026 to March 2027, resulting in a combined expenditure of ₹2,008.69 crore.

In terms of average peak evening capacity offered by both entities, the KSEB would have received only 500 MW from GNA but 1,031 MW from Himachal. GNA had offered to supply only till March 2027, while the Himachal supply would have continued into April and May 2027, when Keralam needs additional supplies most.

Citing these as reasons, it was pointed out that the GNA Energy proposal cannot be a replacement for the Himachal Pradesh offer merely because the tariff quoted was lower.

The KSEB has not sought prior approval of the Kerala State Electricity Regulatory Commission for the proposed power purchase which has now run into a controversy. But at some point, all data pertaining to the proposals and purchase would have to be presented before the Commission for its clearance, power sector sources said.

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