Kerala has been given two months time by the centre to unbudle Kerala State Electricity Board (KSEB) into more than one company.

The Union power ministry is reluctant to give more time for unbundling as the deadline has been pushed off about seven times according to the Central Power minister Sri. Sushil Kumar Shinde. The only option now before the Kerala Government is to decide whether the board can be retained as a single public sector company or it is to be unbundled as per centre's direction.
"It will need extensive discussions to finalise the modus operandi of re-organisation of the board," Kerala Power Minister Sri. AK Balan said. At the same time, he had assured that even if re-organised, the board will remain within public sector as a single entity.

Centre power minister pointed out that, if the board should get any assistance from the Union power ministry, it should to comply by the power reforms prescribed by the Central Electricity Act-2003.

It is while KSEB is fighting a complex situation of hydel power shortage and cut in unallocated share of power from Central pool, that the Damocles sword of unbundling within two months looms large on the board. Weak monsoon has tripped its surplus position in hydel power, produced at just 85 paise per unit. KSEB has signed up for a 1000 MW coal-powered thermal power station in Orissa, but this will be commissioned only 10 years later.

The immediate crisis of monsoon shortage is feared have KSEB incurring about Rs 2548-crore liability in power purchase bills. Even after clamping 30-minutes across-the-board loadshedding and 25% power cut on ET and EHT power consumers, the Board is unable to cope with the demand pressures.