E2,068-cr in KWA power debt is assumed by the Kerala government

The Kerala Water Authority (KWA) has received a great deal of comfort as the state government has assumed its debt of Rs 2,068.07 crore. KWA’s outstanding debts would be paid in ten yearly installments of Rs 206.80 crore each, according to a government directive signed on Tuesday by Additional Chief Secretary K R Jyothilal. This is to make up for the losses incurred when the utility’s power tariffs were written off starting in 2024–2025. The non-plan grant for KWA will yield a sum of Rs 2,068 crore, which the government would reimburse in installments.

The Kerala State Electricity Board (KSEB), which is short on funds, is not satisfied with the decision. The board was anticipating a decision from the finance department to modify the amount collected from consumers as part of the electricity duty, which is 15 paise per unit, in addition to the power rates. Due to the predicted increases in power consumption of 500 MW in April and 600 MW in May, the KSEB is required to pay in advance in order to acquire electricity.

“The order doesn’t contain anything exciting,” a senior board official told TNIE.

Ten yearly installments from the government will be used to settle the debt. However, the KWA is now only paying Rs 10 crore per month toward a Rs 37 crore monthly electricity bill. KWA barely pays Rs 120 crore of the Rs 444 crore yearly electricity bill. Therefore, the arrears are increasing by Rs 324 crore year, meaning the amount owed for electricity will keep rising.

According to the officer, the KSEB is in severe financial need and requires money right now in order to buy electricity for the next two months.

Roshy Augustine, the minister of water resources, welcomed the government’s action and expressed optimism that the finance department will follow suit in order to collect the outstanding water charges from other departments.

“It is a great comfort that the electricity arrears will now be under our control. Recovering the non-plan grant amount to the water authority won’t have a negative effect since the government would back it with more funding if things become tough, the minister said.

Chief Minister Pinarayi Vijayan is set to preside over a meeting on Thursday to talk about the state of the power grid and what has to be done to guarantee that electricity will be available for the next two months. The KSEB is hopeful that the chief minister would step in and provide advance funding for the purchase of electricity for a certain period of time.

Since this summer’s general elections are scheduled, every state will be actively acquiring electricity to guarantee a steady supply. By the end of March, summer will be reaching its zenith in the northern Indian states, and in April and May, electricity will become scarce in the real-time market. According to reports, the KSEB plans would only be enough to stave off demand until the end of March.

The decision by KSEB to buy electricity on the real-time market in order to prevent load-shedding during peak hours has increased its workload since the utility must guarantee a daily cash flow of Rs 8–10 crore for the purchase of electricity.

Although the KSEB has stored water in dams to guarantee electricity production until June 15, an inadequate pre-monsoon rainfall or a postponement of the monsoon season might cause havoc with the board’s projections. The KSEB has suffered as a result of the electrical regulatory authority’s decision to revoke the long-term contract with three private businesses to acquire power at Rs 4.29 per unit. Instead, the KSEB is now had to purchase power at Rs 9.5 to Rs 10 per unit from the realtime market.

Darkness looms big.

KWA’s monthly electricity cost is Rs 37 crore.

KWA only pays Rs. 10 crore a month.

Power arrears for KWA would increase by Rs 324 crore annually.

The crisis meeting will be chaired by the CM.

KSEB will pay back the money in ten yearly installments of Rs 206.80 crore each.

KSEB projects a 500 MW power shortfall in April and a 600 MW shortfall in May.

To make an advance payment for the purchase of electricity, KSEB requires money.

Increased demand for electricity as states actively buy power ahead of the next Lok Sabha elections