Kerala Electricity Body Proposes 7-Year Plan to Bridge ₹6,645 Crore Revenue Gap

Swift Summary

• Kerala State Electricity Regulatory Commission (KSERC) has notified the Appellate Tribunal for Electricity (APTEL) that a period of seven years is required to liquidate the ₹6645.3 crore revenue gap of kerala State Electricity Board (KSEB) to avoid tariff shocks for consumers.
• APTEL had directed all State Electricity Regulatory Commissions to submit roadmaps for liquidation of revenue gaps by March 31, 2028.
• KSERC stated that liquidation within this timeframe would necessitate a surcharge exceeding ₹1 per unit on all electricity consumers in Kerala, including subsidised categories, leading to a potential tariff shock.
• KSERC plans to approach the Supreme Court seeking seven years-until March 31, 2031-for liquidating the revenue gap as opposed to the current judicial mandate limiting it to four years as per an earlier Supreme court judgment dated august 6, 2025.
• Rule 23 of the Electricity (Amendment) Rules 2024 from union Power Ministry allows up to seven years for such liquidation.
• The KSEB reported a revenue surplus of ₹680.47 crore during FY 2024-25 and is expected by KSERC to have further adequate surpluses in FY 2025-26 which could partially address past regulatory gaps.

Indian Opinion Analysis

The KSERC’s proposal highlights challenges in balancing financial sustainability with consumer affordability within India’s power sector framework. while swift liquidation of regulatory gaps might stabilize utilities like KSEB financially, imposing high surcharges risks burdening consumers significantly-a notably sensitive issue given Kerala’s sizeable population reliant on subsidized electricity.

APTEL and judicial directives around tightening deadlines reflect broader national efforts toward reducing inefficiencies in DISCOM finances under rule-based timelines. However, KSERC’s reliance on Rule 23 from recent amendments suggests room for more flexible interpretations and alignment between legislation and judiciary mandates. Optimally utilizing KSEB’s existing revenue surpluses appears prudent but may require careful forecasting considering systemic volatility.

this issue underscores a critical policy crossroads: achieving equilibrium between addressing accumulated debts and ensuring consumer equity-a challenge not unique but intrinsic across various sectors influencing India’s governance models at large.

Read more: Published – September 10, 2025