Kerala not only overlooked the potential of pumped storage projects that could have ensured year-round power generation, but also turned down a long-term contract to procure electricity at a lower cost.

In January 2025, the central public sector undertaking Tehri Hydro Development Corporation (THDC) approached Kerala, offering to supply 184.08 MW of electricity. The offer was to provide power during peak hours from the Tehri Pumped Storage Project (PSP) in Uttarakhand, which was commissioned last March.

The payment per unit would have been a combination of the rate fixed by the Central Electricity Regulatory Commission and the solar tariff for the PSP. Even with both components combined, the cost per unit would have been only around ₹6. Furthermore, the annual reduction in the cost of solar power used for pumping would have proven advantageous for Kerala in the long run.

A K Vijayakumar, the Special Officer of THDC who had visited Kerala for discussions at the time, said he took a personal interest in forging a contract with Kerala, given his Malayali roots. Despite the Chief Minister and the Power Minister expressing interest, the Kerala State Electricity Board (KSEB) turned a cold shoulder to the offer. Following Kerala's withdrawal, Gujarat Urja Vikas Nigam Limited (GUVNL), a Gujarat government-owned entity, signed the contract.

The Tehri pumped storage project currently generates 1,000 MW of electricity. Of this, Uttarakhand purchases 200 MW, while Rajasthan and Haryana each buy 100 MW. The remaining power is procured by BRPL (263.52 MW) and BYPL (152.4 MW), companies operating under Reliance that distribute electricity in Delhi.