KSERC Caps Short-Term Power Procurement At INR 8 Per Unit, Approves 164.16 MU In Kerala

The Kerala State Electricity Regulatory Commission (KSERC) has approved a reduced short-term power procurement plan for the Kerala State Electricity Board Limited (KSEBL), allowing the utility to purchase 164.16 million units (MU) of electricity at an average rate capped at ₹8 per unit from November 2026 to March 2027. The decision, issued on October 29, 2026, aims to address Kerala’s anticipated power deficit while protecting consumers from high electricity procurement costs.

KSEBL had approached the Commission seeking approval to procure 356.63 MU of electricity through the Discovery of Efficient Electricity Price (DEEP) e-bidding portal for the period from October 1, 2026, to April 30, 2027. The utility estimated the total procurement cost at ₹336.25 crore, with an average rate of ₹9.43 per unit across peak and off-peak periods.

The utility cited the El Niño effect, poor monsoon inflows and rising electricity demand as key factors behind the anticipated supply shortage. However, after reviewing the petition and conducting a public hearing on October 22, 2026, KSERC found that KSEBL’s demand projections were overly pessimistic. The Commission observed that the utility had used the sharp increase in electricity demand during September 2026 as the baseline for estimating requirements in subsequent months, without adequately accounting for the temporary climatic conditions that contributed to the spike.

KSERC also criticised KSEBL for not fully considering alternative and potentially cheaper electricity supply options in its Load Generation Balance projections. These included a 540 MW long-term allocation from the Sinnar Thermal Power Plant expected to become available in early 2027, as well as power banking arrangements with Uttar Pradesh, Punjab, Delhi, Bihar and Madhya Pradesh during peak summer months.

The Commission also highlighted the need to utilise battery energy storage systems (BESS), which could provide approximately 250 MW of support during peak hours. It noted delays and under-scheduling of these projects, while emphasising that KSEBL should make greater use of Day-Ahead Market and Real-Time Market purchases, where electricity may be available at lower prices during off-peak hours.

To limit the financial burden on consumers, KSERC rejected expensive peak-hour procurement proposals, including electricity priced at ₹13.89 per unit for March and April 2027. It also disallowed the proposed DEEP portal purchases for April 2027. The approved procurement will focus exclusively on night-time off-peak hours, between midnight and 5:00 a.m. or 8:00 a.m., from November 2026 to March 2027. The revised plan limits the total financial commitment to ₹131.26 crore.

The Commission also directed KSEBL to implement demand-side management measures targeting a reduction of up to 500 MW in peak demand. These measures include public awareness campaigns, school initiatives and restrictions on commercial electricity consumption during peak hours.

Additionally, KSEBL must expedite ongoing BESS projects, including the project at Mylatti, and publish weekly progress updates with time-stamped photographs on its website. KSERC also asked the utility’s chairman and managing director to establish a dedicated team to explore electricity futures trading on exchanges such as MCX and NSE to manage price volatility.

The order underscores the Commission’s emphasis on demand management, timely storage deployment and cost-effective procurement to strengthen Kerala’s power supply position.