KSERC Allows Emergency Power Procurement To Tackle Kerala’s Summer Electricity Shortage

The Kerala State Electricity Regulatory Commission (KSERC) has taken up a petition filed by the Kerala State Electricity Board Limited (KSEBL) seeking urgent approval for short-term power procurement to manage a growing electricity shortage during the peak summer months of 2026. The state has been facing a difficult situation in late April and early May due to poor summer rains and a rising shift toward electric cooking appliances, mainly driven by shortages of LPG supply.

During the hearing, KSEBL informed the Commission that electricity demand has increased more than expected despite efforts to secure additional power. The utility had already arranged power banking with other states and received an extra allocation from the central generating stations. However, in March 2026, the actual demand exceeded projections by around 250 MW. This forced KSEBL to overdraw electricity from the grid, which led to warnings from the Southern Regional Load Despatch Centre (SRLDC) and also resulted in high financial penalties under the Deviation Settlement Mechanism.

To handle the situation, KSEBL proposed setting up a structured system involving an Apex Committee and an Operational Committee to make quick decisions on power procurement. It also requested permission to procure up to 250 MW of electricity from the Term Ahead Market (TAM) at a maximum rate of Rs 10 per unit, along with a small negotiation margin of 5 paise. Initially, the utility also considered using a product called “SPANDAN” available on the NAME OTC platform, but later withdrew this proposal during the hearing due to a lack of clarity regarding its compliance with regulatory rules set by the Central Electricity Regulatory Commission.

The Commission, however, raised concerns about KSEBL’s approach. It pointed out that the utility had not maintained proper daily monitoring and analysis of demand and supply. It was observed that while daytime demand remains relatively low at around 3500 MW due to widespread rooftop solar generation, the demand sharply rises to nearly 6000 MW during the night. This imbalance has led to a situation where surplus power is surrendered during the day, while shortages occur at night.

KSERC also clarified that under existing rules, KSEBL already has the authority to procure power in emergency situations without prior approval, as long as it submits the details within 15 days. In its final order, the Commission allowed KSEBL to procure up to 250 MW of electricity through the Day Ahead Contingency Market and Intra-day Market. This approval is valid for the remaining days of April and until May 15, 2026, or until the situation improves.

The Commission also permitted a pricing margin of up to 5 paise above the Day Ahead Market price, within the limits set by regulations. At the same time, it directed KSEBL to immediately set up a system for daily monitoring of the power situation at the highest management level. The utility has also been asked to submit a detailed report within one week after the procurement period ends.