The Kerala State Electricity Regulatory Commission (KSERC) has issued a draft regulation proposing amendments to the conditions of the license for existing distribution licensees. The amendment aims to revise the license fee structure applicable to Kerala State Electricity Board Limited (KSEB Ltd.) for the next three financial years. The draft regulation, named the Kerala State Electricity Regulatory Commission (Conditions of Licence for Existing Distribution Licensees) (Third Amendment) Regulations, 2025, is now open for stakeholder feedback. Interested parties can submit objections or suggestions to the Commission within one month of the notification. A public hearing on the draft will be conducted, with details to be announced later.

Under the proposed amendment, KSEB Ltd. will be required to remit the license fee for the financial years 2025-26, 2026-27, and 2027-28 at the rate of 0.015% of the revenue generated from the sale of power in the previous financial year. This revision follows an earlier amendment in 2022 that allowed KSEB Ltd. to pay a reduced license fee instead of the standard rate of 0.03%. The 2022 revision was made in response to the company’s financial difficulties, including accumulated losses and liabilities.

The regulatory framework under Section 86(1)(g) of the Electricity Act, 2003, grants State Electricity Regulatory Commissions the authority to levy fees. The original KSERC (Conditions of License for Existing Distribution Licensees) Regulations were introduced in 2006 and subsequently amended in 2009 and 2022. The 2006 regulation mandated that all licensees pay an annual license fee at a rate of 0.03% of their revenue from power sales. However, due to financial constraints, KSEB Ltd. had requested a reduction in this fee. Based on the company’s request and financial situation, the Commission had previously allowed a lower fee of 0.015% for three years starting in FY 2022-23.

KSEB Ltd. has now submitted a fresh request to the Commission, seeking an extension of the reduced fee rate for an additional three years. The company cited its ongoing financial challenges, accumulated losses, and financial liabilities as reasons for its request. After reviewing KSEB Ltd.’s submission, the Commission has decided to extend the reduced license fee rate of 0.015% for the next three financial years. The decision was made after considering various factors, including the operational and financial difficulties of the company, the need to ensure financial stability in the power sector, and the importance of maintaining a sustainable electricity distribution system in Kerala.

The amendment is intended to support KSEB Ltd. while ensuring that the electricity sector remains financially viable without imposing an excessive burden on the company. By continuing the reduced license fee rate, the Commission aims to provide regulatory relief and enable KSEB Ltd. to manage its financial obligations more effectively. The extension of the reduced fee structure is seen as a necessary measure to help stabilize the financial situation of the electricity distribution sector in the state.

The draft regulation has been made available for public review, and stakeholders are encouraged to provide their views before the finalization process. The Commission will take all objections and suggestions into account before making a final decision. The public hearing scheduled for the regulation will provide an additional opportunity for stakeholders to voice their concerns or support for the amendment. The Commission aims to ensure a balanced approach that considers both regulatory requirements and the financial realities of the electricity sector.