labels: economy - general, national thermal power corporation
South to get power from Kayamkulam news
James Paul
27 March 2002
Kochi: The Kerala state government is planning to sell power from the Kayamkulam Thermal Power Project at competitive prices to southern states as one of the measures to tide over the present crisis in the power sector.

It will also agree to securitisation of the arrears payable by the Kerala State Electricity Board (KSEB) to National Thermal Power Corporation (NTPC). Decisions in this regard will be taken in a cabinet meeting.

Official sources say there was a demand for power from the southern states. "Kerala will be able to sell power to them in the range of Rs 3 to Rs 3.50. Though this will be below the cost of power from the Kayamkulam project, the KSEB will save money because it is required to pay fixed costs to NTPC."

Currently, the KSEB is paying Rs 260 crore every year as fixed cost for power from the Kayamkulam plant, while using just 55 per cent of the capacity of the plant. The recurring cost of power is Rs 2.29 per unit. So, if generation at the plant is stepped up to 100 per cent and power is sold at Rs 3 or above, Kerala will be able to shed part of the fixed costs.

The savings could be at least 80 paise a unit if it is sold above Rs 3. The state could also reduce power it is drawing from Kayamkulam from 55 per cent to increase the total savings. This will, in turn, help the KSEB reduce the cost of power it is supplying to domestic consumers.

NTPC has intimated that power supply to Kerala will be stopped if the KSEB fails to pay up the dues immediately. There is also the prospect of the central government cutting Plan assistance to the state at around Rs 30 crore a month and crediting it to the account of NTPC.

 


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South to get power from Kayamkulam