The Palakkad District Panchayat Samithi held on 15.06.96 passed a resolution for requesting the Government of Kerala to allot the Meenvallom Small Hydro Power Project to Palakkad District Panchayat for execution and a Memorandum was submitted to the then Hon. Chief Minister Kerala on 22.07.96 to allot MSHP to Palakkad Jilla Panchayat for implementation.
As per the meeting held on 23.09.96 at Thiruvananthapuram in presence of the then Hon. Minister for Electricity and Hon. Minister for LSGD it was decided to entrust the District Panchayat Palakkad for execution of the Meenvallom Hydel Project and was directed to submit a Detailed Project Report to KSEB.
The President District Panchayat requested the then Hon. Minister for Local Administration on 05.11.96 for allowing to establish a generating Company for implementation of the Meenvallom Small Hydro Power Project. As per Government letter No.15776/p2/96/LAD dt. 20.08.97 Government had directed the District Panchayat to form a generating company. Later Government of Kerala issued an order ratifying the share contribution of District Panchayat to PSHC Ltd during 98-99 and 99 – 2000. By resolution dated 05.03.98 the Dist. Panchayat authorized the President, Dist. Panchayat to sign and present before ROC, EKM for registration of the company
The District Panchayat Samithi held on 13.01.98 and District Planning Committee held on 14.01.98 included the Meenvallom Small Hydro Project under peoples participation programme for the year 1997 –1998. The Secretary, KSEB vide letter No.TCS-1216/98/1310 dt.27.02.98 recommended the request of Jilla Panchayat for allotting the Project.
Considering the proposal of District Panchayat and recommendation of KSEB, Govt. of Kerala allotted Meenvallom Small Hydro Project having an installed capacity of 2.4 MW (Later it was changed to 3 MW) to the Palakkad District Panchayat vide G.O.(MS)No.15/98/PD dt.TVM 22.04.98 and directed to start the Project within one year. It was also decided that KSEB will purchase the electricity thus generated.
M/s. Integrated Rural Technology Centre, Mundur, Palakkad prepared a Detailed Project report (DPR) and the same had been approved by the DPC and forwarded to DLEC by the District Panchayat. District Panchayat requested the Government to make necessary special arrangements to accord Technical Sanction to the DPR of MSHP since the DLEC cannot issue T.S for a project like MSHP having capital investment of Rs.10/- Crores. Government vide G.O.(Rt)3026/98/LAD dt 16.10.98 constituted a Technical Committee consisting of Sri. Sidhartha Menon, Sri. K.Krishnankutty, both from KSEB and Sri. R.V.G. Menon to examine and issue T.S. to the proposed project The Technical Committee approved and accorded T.S. to the project on 25.02.2000.
Power Purchase Agreement (PPA) was signed on 23/01/2007 by Chief Engineer Corporate Planning for KSEB and Chairperson for Palakkad Small Hydro Company Ltd (Pursuant to a resolution of its Board of Directors on 27.12.2006) As per the PPA the tariff period was reckoned as 25 years from the date of commercial operations. The tariff for the sale of energy for the tariff period of 25 years is as per rate mentioned in article 8.4. The tariff for sale of energy to the Board by the Company was at the rate of Rs.2.50 per unit for the first five years from the date of commercial operations and for the next 20 years the tariff shall be at the rate of Rs. 2.12 per unit. The PPA was modified according to the Board Order and with concurrence with the Hon. Kerala State Electricity regulatory Commission vide Order dated 12.01.2015 on O.P.No.5 of 2014. Now the rate is Rs 4.88 per unit generated. So far 9.5 Million units have been generated and an amount of Rs 4.69 Crores has been received by PSHC from sale of Energy.