The Hindu Business Line : CAG lists loss due to closure of KSEB thermal power plants

THE under-utilisation of the capacity of two thermal plants owned by the Kerala State Electricity Board (KSEB) has resulted in extra avoidable cost of Rs 351.28 crore, according to the Comptroller and Auditor General of India (CAG).

The CAG report for 2002-03, tabled in the State Assembly, also says that failure of the board to avail itself of the benefits of tax holiday pertaining to the Kayamkulam unit of the National Thermal Power Corporation (NTPC) resulted in avoidable payment of Rs 48.35 crore as income tax during April 1999 to June 2003.

The under-utilisation of capacity was in respect to the Brahmapuram and Kozhikode diesel power projects commissioned in 1997-98 and 1999-2000, respectively, with a combined generating capacity of 234.6 MW.

In case of the Brahmapuram project, it has been pointed out that the operation of the plant at an optimum capacity of 68.5 per cent plant load factor would have reduced cost per kilowatt-hour of energy produced by virtue of higher absorption of fixed expenses, reduction in fuel consumption and minimum stoppage of the plant.

Instead, the plant was operated for managing the load requirement of peak periods only, resulting in an extra cost of Rs 210.84 crore.

Similarly, in the case of the Kozhikode project, the board was operating it mainly as a peak load plant at a capacity of 39 per cent, 25 per cent and 33 per cent, respectively, during the three years up to 2002-2003, against the plant load factor of 80 per cent. This had cost the board Rs 140.44 crore.

The report also notes that the failure of the board to purchase the entire quantity of power available for sale from the plants of NTPC Kayamkulam, BSES Kerala Power Ltd and Kasargod Power Corporation Ltd, as per the power purchase agreements, resulted in avoidable payment of deemed generation charges of Rs 395.33 crore during 1999-2003.

The board lost Rs 9.99 crore during 2001-03 due to its failure to claim excise duty exemption on fuel in the case of Kasargod project.

It also incurred additional expenditure of Rs 16.47 crore by purchasing high-cost thermal power during 1999-2001 even as it could draw cheaper power from the central pool, says the report.