KSEB urges SERC to reconsider decision on R&ME

THIRUVANANTHAPUIRAM: Where age matters, so does repair and maintenance expenses. At a time when the explosion at the KSEB’s Moolamattam power house is being blamed on old equipment, it may come as a surprise to see the KSEB readily admitting that its assets have ‘’expired their useful life.’’ There’s a good reason for it, though; the State Electricity Regulatory Commission had trimmed the KSEB’s projections for repair and maintenance (R&M) costs for the 2011-2012 fiscal.  Now the KSEB has urged the Commission to reconsider its decision on R&M costs too as part of a larger request to review a June 1 order slashing the KSEB’s revenue gap from Rs 2208.31 crore to Rs 887.81 crore. ‘’Most of the KSEB assets are old and already depreciated and expired their useful life, however the KSEB has been extending their life through proper maintenance,’’ the KSEB has told the Commission in its review petition. Though the KSEB had put R&M costs for 2011-2012 at Rs 243.75 crore, the Commission allowed only Rs 185 crore, slashing the KSEB claim by 24.10 per cent. According to the KSEB, its R&M plan was based on field reports, inflation, age of assets and past actuals. R&M has increasing importance in view of stricter performance standards and the demand for uninterrupted power supply to consumers, the KSEB said. In its June 1 order, the Commission had fixed the deficit at Rs 887.81 crore despite the board claiming Rs 2208.31 crore. The KSEB has charged the Commission with declining or limiting many of the essential expenses of the power utility. The Commission has disallowed/limited many ‘’essential expenses components including cost of generation of power, cost of power purchase, interest and finance charges, employee cost, repair and maintenance expenses, administration and generation expenses, return on equity etc,’’ the KSEB noted in its petition. While the KSEB had put power generation costs for the 2011-2012 fiscal at Rs 396.57 crore in its Aggregate Revenue Requirement (ARR) petition, the Commission had whittled it down to Rs 264.58 crore.Likewise, the cost of power purchase too, among other things, found an unsympathetic listener in the Commission. The KSEB’s claim that power purchase would cost it Rs 4031.80 crore, the Commission had trimmed it down to Rs 3660.67 crore.