Kerala's power purchase bill to rise by ₹1,596 crore in 2026-27, KSEB tells regulator
The Kerala State Electricity Board (KSEB) has projected a significant increase in its power purchase expenditure for 2026-27, with revised estimates showing a rise of ₹1,596.28 crore from the provisional approval given by the state regulator. The new projection, submitted before the Kerala State Electricity Regulatory Commission (KSERC), puts the anticipated spending at ₹13,344.11 crore, compared to the earlier approved amount of ₹11,747.83 crore.
The revised figures are part of the KSEB's mid-year performance review and revised forecast petition for the period from 2024-25 to 2026-27. The regulatory commission has scheduled a hearing on the matter on August 18 in Thiruvananthapuram.
The upward revision comes amid concerns over Kerala's ability to meet its peak power demand. The state's own generation capacity accounts for only about 30% of its total requirement, making it heavily dependent on external sources such as central generating stations (CGS), independent power producers (IPPs), power traders, and power exchanges.
According to the KSEB's petition, the state expects a power deficit of 1,187.66 million units (mu) in 2026-27. The total energy requirement is estimated at 33,813.53 mu, while availability from all sources is projected at 32,625 mu. This deficit is expected to be bridged through short-term purchases, which constitute a significant portion of the revised spending.
The KSEB's power purchase expenditure has been on an upward trajectory in recent years, driven by rising demand during evening peak hours. In 2023-24, the utility spent ₹12,982.59 crore on power purchases. The projected spending for 2026-27 includes ₹1,109.07 crore earmarked for short-term purchases through the Union Power Ministry's Discovery of Efficient Electricity Price (DEEP) e-bidding and e-reverse auction portal, specifically to meet the anticipated peak deficit.
The power purchase estimates are a critical component of the multi-year tariff (MYT) process, which determines electricity tariffs for consumers. The KSERC's provisional approval for 2026-27 was granted while clearing the MYT petition, and the final figures will depend on the outcome of the upcoming hearing.
The issue has gained urgency as Kerala recently faced a crisis in meeting peak demand, just before the southwest monsoon strengthened over the state. This has highlighted the need for robust planning and adequate procurement to avoid power shortages.
Consumers and industry stakeholders will be watching closely as the regulatory commission examines the KSEB's revised estimates. The hearing on August 18 will provide an opportunity for public input and scrutiny of the utility's projections.
The KSEB's submission underscores the challenges faced by the state in balancing its growing electricity needs with available resources. With internal generation covering just three-tenths of demand, Kerala's reliance on external power sources is likely to continue, making efficient procurement and cost management essential.
As the state moves towards a more renewable-energy-focused future, the immediate priority remains ensuring reliable and affordable power supply. The upcoming regulatory decision will play a key role in shaping Kerala's electricity landscape for 2026-27 and beyond.
