KSERC Approves Kerala’s Short-Term Power Purchase Plan With Strict Monitoring Guidelines

The Kerala State Electricity Regulatory Commission (KSERC) recently issued a final order approving a short-term power purchase plan proposed by the Kerala State Electricity Board Ltd (KSEBL) to manage expected power shortages during two critical periods: September to December 2025 and March to May 15, 2026. The board had submitted the petition seeking approval for the procurement of electricity from various traders, including Greenko Energies, Jindal Power, and NVVN. The plan included both peak power during evening hours and Round the Clock (RTC) power, with September 2025 requiring 400 MW of peak power at ₹9.20 per unit. An interim order had earlier allowed procurement for the initial months and March 2026, while April and May 2026 were pending a revised demand estimate.

A key concern raised by the Commission was the accuracy of KSEBL’s demand projections. The actual peak demand recorded in July and August 2025 was lower than the board’s internal estimates. The regulatory body warned that overestimating demand could result in purchasing power at higher rates, adversely affecting the board’s financial health. To mitigate this, KSEBL was directed to monitor daily actual peak consumption and report back to the Commission. Any surplus power purchased was instructed to be sold promptly to prevent losses.

For the high-demand months of April and May 2026, the Commission asked KSEBL to re-evaluate its peak demand projections, which were significantly higher than in previous years. The board projected a peak demand of 5,928 MW for April 2026, a 15% increase over its 2024 estimate. Although KSEBL maintained its estimates after review, the Commission decided not to intervene due to the urgency of power requirements. However, it stressed the importance of submitting detailed monthly comparisons of projected versus actual load and generation figures.

The Commission also issued several directives to improve overall power management. Emphasis was placed on Demand Side Management (DSM) measures to reduce peak consumption between 7 p.m. and 12 a.m., which KSEBL is reportedly addressing through public awareness campaigns. The board was further encouraged to explore SWAP transactions, where power can be obtained during peak hours and returned during off-peak or monsoon months, as well as opportunities in the electricity futures market on NSE and MCX for risk hedging.

The final order confirmed the adoption of the tariffs discovered through the DEEP portal and granted approval for the proposed power purchases, provided KSEBL follows all monitoring and reporting guidelines set by the Commission. The approval ensures that the state will have access to the necessary power supply during critical periods while maintaining financial prudence. The regulatory oversight underscores the importance of accurate demand estimation, careful financial management, and proactive measures to balance supply and demand. The order reflects a cautious but supportive approach to ensure a reliable electricity supply, highlighting the role of regulatory guidance in maintaining grid stability and financial sustainability. Through these measures, the board is expected to manage power shortages effectively while optimizing operational and financial efficiency.

This decision also encourages the use of innovative strategies like DSM, SWAP transactions, and participation in electricity futures markets to better manage peak demand and reduce overall costs. By following the Commission’s directives, the board aims to maintain a reliable power supply, prevent financial losses, and strengthen its overall power management approach, benefiting both consumers and the electricity system in the state.

The order represents a balanced approach to addressing immediate electricity needs while promoting long-term efficiency, ensuring that the state is prepared for seasonal peaks and unforeseen shortages in the power sector.