KSERC Allows KSEBL To Procure 250 MW Via Power Exchanges Amid Peak Summer Demand Crisis In Kerala

The Kerala State Electricity Regulatory Commission (KSERC) issued an order on April 25, 2026, addressing an urgent request from Kerala State Electricity Board Limited (KSEBL) for short-term power procurement to manage a growing electricity shortage in the state. The decision comes at a time when Kerala is facing high electricity demand during the peak summer period.

According to the utility, daily power consumption has crossed 100 million units, putting significant pressure on the system. Despite arranging power through banking and swap agreements with other states, KSEBL reported a shortage of around 250 MW during peak hours. The situation has been made worse by weak summer rainfall, which has reduced hydro power generation, and an increased use of electric cooking appliances due to a shortage of LPG across the country.

KSEBL informed the Commission that relying only on the Day-Ahead Market (DAM) was not enough, as lower availability of power in the market limited procurement. This forced the utility to draw excess power from the grid, leading to high deviation charges. To address this issue, KSEBL requested permission to procure additional power through alternative market options.

After reviewing the petition, the Commission approved the proposal, allowing KSEBL to procure up to 250 MW through the Day Ahead Contingency Market and the Intra-day Market. This approval is valid for the remaining days of April and up to May 15, 2026. KSERC also set a pricing condition, permitting the utility to negotiate up to 5 paise per unit above the discovered DAM price, as long as the final cost does not exceed the ceiling rate of Rs 10 per unit set by the Central Electricity Regulatory Commission (CERC).

During the hearing, KSEBL withdrew its earlier request to use the SPANDAN product available on the NAME OTC platform. The utility stated that it did not have enough clarity on whether the platform complies with CERC regulations. The Commission noted that KSEBL can approach again with a separate petition if it provides proper technical and regulatory details.

While granting approval, KSERC expressed concern over how the situation was handled. It pointed out that the utility did not maintain proper monitoring and failed to give clear data or analysis on why earlier swap arrangements were not used effectively. The Commission observed that such summer shortages are common and expected better preparedness from the utility.

To avoid further issues, KSERC has directed KSEBL to start daily monitoring of power demand and supply and report updates to senior management, including the Chairman and Managing Director, until the end of May. The utility has also been asked to submit a detailed report of daily power purchases and costs within one week after completing the procurement period.