The Kerala State Electricity Regulatory Commission (KSERC) has approved a revised bid evaluation framework proposed by the Kerala State Electricity Board Ltd (KSEBL) for procuring 300 MW of peak power. The approval allows KSEBL to modify the ongoing tender process for purchasing peak-hour electricity between 18:00 and 24:00 hours on a lump-sum tariff basis for five years from January 2027 to December 2031.

The decision comes after KSEBL faced several challenges in securing long-term and medium-term power supplies. Earlier procurement attempts were cancelled due to high discovered tariffs ranging between Rs. 5.76 and Rs. 7.48 per unit, which were considered financially unviable. With increasing peak power demand in Kerala and exceptionally high short-term round-the-clock (RTC) electricity prices, KSEBL decided to focus on procuring power specifically during peak hours.

The utility had floated an electronic tender through the DEEP Portal in March 2026. During the pre-bid consultation process, several renewable energy (RE) and Battery Energy Storage System (BESS) developers showed interest but highlighted challenges related to the tender structure and requested additional time for participation.

A key issue raised during the process was related to Interstate Transmission System (ISTS) charge waivers available for eligible renewable energy and storage projects. Under central government policies, RE and BESS projects can receive partial or complete exemptions from ISTS charges depending on their commissioning timelines.

KSEBL observed that the conventional bid evaluation method, which selected the lowest tariff bidder based on the generator’s Central Transmission Utility (CTU) interconnection point, did not reflect the actual landed cost of electricity for the utility. Since KSEBL bears the transmission-related costs, evaluating bids only at the generation point could result in selecting a financially disadvantageous option.

To address this issue, KSEBL introduced “Corrigendum-V,” creating a revised bid evaluation mechanism. Under the new framework, the delivery point for commercial settlements and monthly billing under the Agreement for Power Purchase (APP) will continue to remain at the generator’s CTU interconnection point.

However, for bid ranking purposes, KSEBL will apply a standard ISTS charge of Rs. 0.562 per kWh to thermal and conventional power bids. For renewable energy and storage-based projects, the additional charge will be adjusted according to their eligibility for ISTS waiver benefits. Developers will also be required to submit formal declarations confirming their waiver eligibility to avoid future disputes.

KSERC approved the revised methodology with a modification that KSEBL should calculate the standard ISTS evaluation charge based on a 12-month average of CTUIL invoices instead of relying on a single month’s data.

The Commission also approved changes in the Request for Qualification (RFQ) and Request for Proposal (RFP) documents, replacing earlier references related to selecting the lowest tariff at the delivery point. Additionally, previously approved regulatory deviations from earlier orders were allowed to continue.

KSERC confirmed that electricity procured from renewable energy and BESS projects through this tender will contribute towards KSEBL’s Renewable Purchase Obligations (RPO) and Energy Storage Obligations (ESO). After completion of the bidding process, KSEBL will have to approach the Commission for final approval of the discovered tariff.