This time the power crisis seems to have arrived early. Power minister K Krishnankutty told the Kerala Assembly on Tuesday, March 18, that Kerala State Electricity Board Limited (KSEBL) was going through a severe financial strain.

"As it stands, over 80% of Kerala's daily needs are met from outside," the minister said during the Question Hour. "Since most of our purchases are from thermal stations, power purchase costs are bound to rise. Already, there is a pan-India increase in thermal costs. On top of this are the transportation charges. Together, these are adversely affecting the finances of KSEBL," Krishnankutty said.

The power minister said that power shortage was imminent as the summer peaked. "This in turn can cause an inversely proportional increase in power costs," the minister said.

He said that for years the annual power purchase cost had been on the rise. In 2022-23, it was Rs 11,240.62 crore. In 2023-24, this swelled to Rs 12,982.59 crore. This ongoing fiscal (2024-25), till December 31, 2024, the cost was Rs 9930.72 crore.

"Past experience tells us that power consumption would increase exponentially in the next four months," Krishnankutty said. "Therefore, KSEBL has no choice but to find the necessary funds to meet the increasing power purchase cost and other allied expenditure. This is bound to cause a fiscal crunch in KSEBL," he said.

Kerala has every reason to worry. The first time daily consumption crossed 100 million units (MU) this year was on March 4. That day it was 100.61 MU. From then on, till March 9 when summer showers were received in various parts of the state, the daily consumption was generally moving with an upward slant. On March 5, it was 101.82 MU. March 6 - 102.32 MU. March 7 - 102.66 MU. March 8 - 101.45 MU. March 9 - 95.16 MU.

Last year, daily consumption touched 100 MU only on March 11. It was 100.22 MU then. After that, the rate kept above 100 for the rest of the month. With middle-March showers sustaining for a longer period this time, KSEBL planners hope that it would remain below 95 MU for the rest of the month. On March 17, it was 92.33 MU.

On the bright side are the agreements that KSEBL had entered into with power producers to secure power at reasonable costs. "This time, we have stopped the convention of paying exorbitant costs for peak hour purchases," the minister said.

Instead, KSEBL has entered into swap arrangements with states like Punjab, Uttar Pradesh and Himachal Pradesh for the months of March, April and May. "We need to return the power only during the June-September stretch. By that time Kerala will receive copious rains and there will be no power shortage," Krishnankutty said.

Such swap arrangements have yet another advantage. It do not involve payments and, as a result, KSEBL's finances will not be burdened during the summer. Further, to meet peak demand, the minister said that tender proceedings were on to install two 500 MW battery energy storage systems.