Kerala Opposition cautions the government against hiking power tariff

V.D. Satheeshan criticizes Kerala government for increasing power tariffs, causing financial losses and public outrage, demanding accountability.

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.