Why Kerala borrows power in summer and gives it back in the monsoon: the inter-State swap

Background

The Kerala State Electricity Board (KSEB) has begun drawing up to 800 MW from the Himachal Power Corporation at ₹14.5 per unit, about 28 crore units in October 2026, after a deficient monsoon cut the State's own generation. Most of KSEB's own generation is hydroelectric, so it rises and falls with the water stored in the State's dams. Under a 'swap' arrangement, KSEB buys power from other States at the summer peak and returns the same power during the monsoon, when its hydel stations generate more. Because Kerala's peak demand comes at night, about 95 per cent of the Himachal supply is taken at night. The State electricity regulatory commission had allowed KSEB to buy power at a maximum of ₹10 per unit, and permission is needed for any purchase above that ceiling. KSEB's position is that in an emergency it may approach the commission for approval within 10 days of starting the purchase. The additional expenditure for October 2026 at ₹14.5 per unit is put at ₹410 crore.