Mukkudam Small HEP is conceptualized as a run-of-the-river scheme to operate continuously during monsoon season and intermittently in lean flow period. Project is envisaged to develop as an Independent Power Project as per the policies of Government of India and Government of Kerala for involving private sector participation in hydro power development under the self-identified schemes category. The proposal is to harness the power potential from the mountain stream parathodu flowing towards Muthirapuzha (a tributary of River Periyar which is a major river in the state of Kerala) by creating a small pond with a broad crested weir at Mukkudam village of Idukki District.

The project is having a very high design head of 312 meters; hence very less quantity of water is required for power generation. The estimated power generation from this project is 11.09 million units. Presently the Kerala state is importing around 65% of its demand from neighboring states and the state utility, the KSEB Ltd is ready to procure power generated from this project.