BJP Targets LDF Over 465-MW Power Pacts, Claims ₹2,130 Crore Burden on KSEB

Amid Kerala’s escalating power crisis, the BJP has renewed its attack on the previous LDF government, alleging that the cancellation of long-term power purchase agreements has saddled the Kerala State Electricity Board (KSEB) with an additional financial burden of more than ₹2,130 crore. The party has alleged that the loss of relatively cheaper contracted power forced KSEB to depend on costlier market purchases, with the additional burden eventually reaching consumers through higher electricity charges.

BJP national executive member Kummanam Rajasekharan alleged that the cancellation of the low-cost agreements involved an “understanding” between the then Pinarayi Vijayan government, former Power Minister K Krishnankutty and the Kerala State Electricity Regulatory Commission (KSERC). He demanded a comprehensive probe into the circumstances surrounding the agreements, the role of officials and possible procedural lapses.

The controversy centres on four power purchase agreements covering 465 MW, signed by KSEB in 2014 under the previous UDF government. The contracts with generators including Jhabua Power and Jindal Power provided electricity for 25 years at around ₹4.26–₹4.29 per unit.

The dispute, however, predates the 2023 cancellation. KSEB’s procurement process had faced regulatory scrutiny over deviations from the Union Ministry of Power’s standard bidding guidelines. The CAG also flagged concerns over the procurement procedure. Despite these issues, KSERC allowed KSEB to procure power provisionally, and the disputed agreements continued for several years.

The turning point came in May 2023, when KSERC rejected final approval for the four agreements, citing procedural and technical deficiencies. KSEB subsequently sought replacement power, including through a tender for 500 MW, but the process failed to secure the required capacity. In another procurement exercise, bids were around ₹6.88 per unit, while market prices reportedly reached ₹7–₹10 per unit during periods of tight supply.

KSEB later estimated that the cancellation had caused an additional financial burden exceeding ₹2,130 crore. The BJP claims the cost was ultimately passed to consumers through surcharges and higher bills.

In October 2023, the Kerala government invoked Section 108 of the Electricity Act seeking reconsideration, after which KSERC temporarily allowed restoration of the agreements. However, APTEL subsequently rejected the restoration, and the matter reached the Supreme Court, which upheld key legal limitations on the government’s intervention.

The controversy has resurfaced amid Kerala’s 2026 power crisis, with rising demand and heavy dependence on electricity purchased from outside the state. Electricity Minister Sunny Joseph has said the government is pursuing legal measures while exploring solar, battery storage and hydropower projects.

The BJP has demanded accountability, but the regulatory record shows that the dispute involves a decade-long chain of 2014 procurement decisions, regulatory objections, provisional approvals, the 2023 rejection and subsequent litigation, making it more complex than a straightforward political allegation of cancellation.