Kerala CM Satheesan says no GNA power deal was signed, alleges pressure; Opposition calls crisis 'artificial'

Kerala Chief Minister V D Satheesan on Wednesday said his government never signed an electricity purchase agreement with private supplier GNA Energy, and alleged that he had been pressed to clear the deal quickly on the basis of a warning of power cuts that later turned out to be unfounded.

Speaking to reporters after a Cabinet meeting on 11 November, Satheesan said there was nothing to withdraw from because no contract existed. He said he had been examining the file rather than delaying it, and added that he would not sign a file simply because it arrived marked as urgent.

What the file said

According to the Chief Minister, the file placed before him offered two sources of short-term power. One was Himachal Pradesh, quoted at around Rs 14 or more per unit, but that power had already been allotted to Rajasthan. The other was GNA, at a little under Rs 9 per unit, which made it the cheaper of the options still available.

Satheesan said the Kerala State Electricity Board (KSEB) had written to him warning of prolonged load-shedding from November unless a purchase decision was taken. A subsequent review by another team, he said, found no such shortfall expected in November or December. The government has decided not to buy from GNA for now, and Electricity Minister Sunny Joseph had correctly said there was no current requirement, the Chief Minister added.

He said NTPC has offered power at Rs 5.18 per unit from April, which would reduce the need for costlier short-term purchases. The state would buy from whichever source was cheapest, he said, and promised a longer-term plan by the end of the month covering renewable generation, battery storage and a long-term power purchase agreement. He noted that only about 15 per cent of Kerala's electricity demand is met from generation within the state.

Opposition's charge

Leader of the Opposition Pinarayi Vijayan alleged that the UDF government had created an artificial power crisis in order to buy electricity from a private firm at high rates, and that it retreated only after concerns over irregularities and possible losses to the exchequer surfaced. He also alleged that the Chief Minister had kept the Electricity Minister in the dark. Satheesan said Vijayan's statements contradicted each other, and blamed the previous LDF government for failing to lock in long-term supply when rates were lower. Reports did not carry a response from GNA Energy.

Why it matters

Kerala buys most of the electricity it uses from outside the state, so the price of short-term purchases feeds directly into KSEB's finances and, eventually, consumer tariffs. The row has also brought out an open disagreement within the government over who pushed the GNA proposal and on what basis, a question the Chief Minister did not say would be separately examined.