KSERC approves Rs 250 crore threshold for TBCB in intra-state transmission projects

The Kerala State Electricity Regulatory Commission (KSERC) has issued an order approving a key financial threshold for transmission project development, acting on policy directions from the State Government. In the matter of setting a threshold limit for Tariff Based Competitive Bidding in intra-state transmission projects, the Commission formally established that all such projects with an estimated capital cost exceeding Rs 250 crore will be developed through the competitive bidding route.

Legal and regulatory background
The decision follows a sequence of legal and policy developments. The Supreme Court, in its 23 November 2022 judgment in Tata Power Company Limited vs. Maharashtra Electricity Regulatory Commission & Ors., directed State Commissions to frame tariff regulations. Subsequently, KSERC incorporated provisions for Tariff Based Competitive Bidding tariff adoption in its First Amendment Regulations of 2023. Regulation 62A states that the Commission shall adopt tariffs discovered through a transparent competitive bidding process and notes that the threshold limit above which projects must follow this route may be notified by the State Government under Section 108 of the Electricity Act.

State government directive linked to reform-linked borrowing
The immediate trigger was a directive issued by the Government of Kerala on 21 November 2025. The directive complied with revised guidelines from the Department of Expenditure, Ministry of Finance, Government of India, which link additional state borrowing of 0.5% of Gross State Domestic Product to power sector reforms. One of the conditions includes prescribing a threshold limit for intra-state transmission projects to be developed through the competitive bidding route. The State Government directed the Commission to approve Rs 250 crore as the threshold limit, a figure proposed by Kerala State Electricity Board Limited.

Commission’s findings and approval
In its reasoning, the Commission noted that prescribing the threshold is a matter of state policy involving public interest, especially in the context of power sector reforms and fiscal incentives linked to borrowing. It observed that the Government direction issued under Section 108 of the Electricity Act, 2003 satisfied the requirements of Regulation 62A, which requires such policy direction to be communicated to the Commission. Based on this, KSERC approved the threshold.

Final directions issued by KSERC
The order sets out two key conditions. First, all intra-state transmission projects with an estimated capital cost above Rs 250 crore will follow the competitive bidding route in line with Central Government guidelines. Second, the successful bidder must approach the Commission for a transmission license and tariff adoption under the Electricity Act, 2003. The order aligns state policy, central reform mandates, and regulatory provisions, creating a clear framework for the competitive development of large transmission projects in Kerala.

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