KSERC Approves INR 250 Crore Threshold for TBCB in Intra-State Transmission Projects

The Kerala State Electricity Regulatory Commission (KSERC) has approved a threshold limit of INR 250 crore for implementing intra-state transmission projects through the Tariff Based Competitive Bidding (TBCB) route, in line with policy directions issued by the Government of Kerala.

The decision was taken in accordance with Regulation 62A of the KSERC (Terms and Conditions for Determination of Tariff) (First Amendment) Regulations, 2023, which provides for adoption of tariffs discovered through competitive bidding for transmission projects executed via the TBCB route.

As per the Commission’s order, all intra-state transmission projects with an estimated capital cost exceeding INR 250 crore will mandatorily be developed through the TBCB mechanism, following the Guidelines for Encouraging Competition in the Development of Transmission Projects issued by the Ministry of Power.

The approval follows a policy directive issued by the Kerala government through  The directive was issued pursuant to revised guidelines of the Department of Expenditure, Ministry of Finance, Government of India, which link additional borrowing of up to 0.5 per cent of Gross State Domestic Product (GSDP) for FY26 to performance-based power sector reforms.

Among the mandatory conditions prescribed under the revised borrowing framework are compliance with the Electricity (Amendment) Rules, 2022, particularly in relation to Fuel and Power Purchase Cost Adjustment (FPPCA), and the prescription of a threshold limit for developing intra-state transmission projects through competitive bidding.

Kerala State Electricity Board Ltd. (KSEB Ltd.) had proposed the INR 250 crore threshold, which was subsequently approved by the State Government and placed before the Commission for consideration. KSERC observed that the prescription of a threshold limit for TBCB projects is a matter of state policy involving public interest, especially in the context of power sector reforms and fiscal incentives.

The Commission noted that Regulation 62A explicitly permits the State Government to notify such a threshold limit as a policy decision and to intimate the Commission under Section 108 of the Electricity Act. Accordingly, KSERC held that the government’s directive fully complies with statutory and regulatory provisions.

Under the order, successful bidders selected through the TBCB process will be required to approach the Commission for grant of transmission licence and adoption of tariff under the provisions of the Electricity Act, 2003.