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C. Shivkumar

BANGALORE, July 6

THE Karnataka Power Transmission Corporation Ltd (KPTCL) has opened negotiations with the Kerala State Electricity Board for sale of 100 MW of power from the 1,015-MW private power project to be set up in Mangalore.

Sources said current indications are that Kerala was inclined to get into a long-term supply arrangement, covering the entire power purchase agreement of 30 years.

This was because the indicated levelised tariff is in the range of 2.45 paise a unit, but likely to go down further. This tariff is exclusive of evacuation charges, which would also have to be finalised.

Currently, Kerala's only non-hydel sources are from the central power generating stations and the sole independent power project in Kochi promoted by BSES. In addition to the 120-MW station in Kochi, there is also another 350-MW liquid fuelled station operated by the National Thermal Power Corporation. However, Kerala has been unwilling to draw power from these stations due to the high variable cost element. The tariff, inclusive of both fixed and variable, was in excess of Rs 4 a unit.

Consequently, these stations have been asked to back down. Besides, the power drawn by Kerala from the Central Government power generating companies was also in the region of about Rs 2.50 per unit from the older station. In the case of the newer stations, the tariff quoted is about Rs 3 a unit.

The power supply offered by the KPTCL is from the project promoted by Nagarjuna Power Corporation Ltd (NPCL), which has now been given the status of mega power station and consequently a multi-State power station.

In the event of the contract being finalised, sources said that interface would be at Kasargod in Kerala. NPCL's low tariff is because of the customs duty concession it will enjoy in view of its mega power status, which has brought down project costs by over Rs 100 crore.

The power supplied would however be on a displacement basis, implying that Karnataka would draw all the power from the station, though Kerala would be assured of a supply of 100 MW per year equivalent to 876 million units (mu) per annum or 2.4 mu per day.

Given the low tariffs, Kerala was interested in drawing more power , the sources said. This was because it would be able to manage the finances better given the resistance to hikes in power tariffs in the State.

Besides, Kerala has traditionally been dependent on low tariff hydel power.

However, supplies have been hit during the last two years in view of low inflows into the reservoirs. The generation for the first three months of this year from the 780-MW Idukki hydel station, which is the mainstay, has been only about 300 mu against the programmed generation of 450 mu.

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