KSERC Approves Power Banking Deals To Manage Summer Electricity Shortage In Kerala

The Kerala State Electricity Regulatory Commission (KSERC) has approved a power banking arrangement proposed by the Kerala State Electricity Board Limited (KSEBL) to manage an anticipated electricity deficit during the upcoming summer months. The approval, issued in an order dated January 13, 2026, allows KSEBL to enter into agreements with BSES Yamuna Power Limited (BYPL) and Arunachal Pradesh Power Corporation Pvt Ltd (APPCPL) to ensure sufficient electricity supply for the state.

KSEBL had filed the petition after forecasting a power shortage between January and April 2026. To meet this deficit without relying on immediate short-term power purchases through the DEEP portal, the utility explored banking arrangements. Under these arrangements, KSEBL will receive power during periods of shortage and return an equivalent amount during the monsoon season from June to September, when Kerala usually experiences surplus power from hydroelectric generation.

The Commission approved two main transactions under this plan. The first is a direct agreement with BYPL, under which KSEBL will receive 50 megawatts (MW) of round-the-clock power from January 1 to April 30, 2026. The state will return the same amount of energy on a round-the-clock basis between June 16 and September 30, 2026. The second transaction is through APPCPL, which acts as a trader on behalf of BYPL. This deal involves the supply of 75 MW of power during evening peak hours from 17:00 to 24:00, from March 1 to April 30, 2026. KSEBL will return this power between June 16 and September 30, 2026, during a shorter evening window from 20:00 to 24:00. This arrangement also includes a trading margin of 1.5 paise per unit.

The Commission noted that under Section 86(1)(b) of the Electricity Act, 2003, and Regulation 78 of the KSERC Tariff Regulations, 2021, prior approval is mandatory for such procurement. It highlighted that banking arrangements are generally advantageous as they allow the state to utilize seasonal power surpluses without immediate cash transactions, effectively balancing supply during lean periods.

Although KSEBL had issued Letters of Award for these agreements back in August 2025, the Commission’s recent order provides the necessary legal ratification for the contracts to move forward. The ruling also directs KSEBL to submit a consolidated statement of all banking transactions from 2023 through 2026 within 30 days. This step ensures transparency in the state’s power procurement strategy and alignment with regulatory standards.

By implementing these banking arrangements, Kerala aims to secure a stable electricity supply for consumers during the peak summer months of 2026. The move reflects a strategic approach by KSEBL to manage seasonal fluctuations in power demand and generation, leveraging surplus energy from the monsoon season to cover anticipated deficits in the dry months. The Commission’s approval underscores the importance of regulatory oversight while supporting innovative solutions to maintain an uninterrupted electricity supply for the state.

This initiative is expected to help KSEBL efficiently manage its power resources and avoid immediate reliance on short-term market purchases, ultimately benefiting consumers by reducing the risk of power shortages during the critical summer period.