Kerala Commission Ratifies KSEBL’s Short-Term Power Banking Arrangement

The Kerala State Electricity Regulatory Commission (KSERC) has granted post-facto approval and ratified a short-term power banking arrangement entered into by the Kerala State Electricity Board Limited (KSEBL) to manage electricity shortages during January and February 2026.

The Commission issued its order on September 3, 2026, following a petition filed by KSEBL seeking approval for the arrangement and condonation of the procedural delay. The order was issued by KSERC Chairman T. K. Jose and Member B. Pradeep.

KSEBL had projected a requirement to secure 500 MW of additional power under the central SHAKTI policy for the 2025–26 financial year. However, the related tendering process could not be completed on time. This resulted in power shortages during the peak evening demand period of 6 PM to 10 PM in January and February 2026.

To avoid grid instability and consumer load shedding, KSEBL entered into a short-term power banking arrangement with BSES Yamuna Power Limited, with Arunachal Pradesh Power Corporation Private Limited acting as the intermediary trader.

Under the provisional agreement finalized in December 2025, BSES Yamuna Power supplied 50 MW to Kerala during January 2026. The supply was increased to 75 MW during February 2026. KSEBL received 6.40 million units of electricity in January and another 8.40 million units in February.

The arrangement was structured as energy banking rather than a conventional power purchase. Instead of making direct payments for the electricity received, KSEBL agreed to return 103% of the banked energy during the monsoon period from July 1 to September 30, 2026.

The return power is scheduled during off-peak hours, specifically from midnight to 3 AM and from 10 PM to midnight. This allows KSEBL to use surplus electricity available during low-demand periods to meet its obligation.

KSERC also approved a trading margin of 1.5 paise per kWh for the intermediary trader involved in facilitating the transaction.

Under Regulation 78 of the applicable tariff regulations, prior Commission approval is generally required for short-term power procurement. In emergency situations, the proposal must be submitted within 15 days. KSEBL sought retrospective approval, citing the urgent need to maintain reliable electricity supply during the peak deficit period.

After examining the matter under the Electricity Act, 2003, and the Kerala Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulations, 2021, the Commission accepted KSEBL’s justification.

KSERC noted that energy banking does not involve an immediate cash outflow for electricity procurement and can provide an economical way to address temporary power shortages. Considering the public interest and the need to ensure uninterrupted electricity supply, the Commission condoned the procedural delay and approved and ratified the entire banking arrangement and associated trading terms.