HYDERABAD: The Telangana Electricity Regulatory Commission (ERC) has directed power utilities to ensure transparency in short-term power procurement, stating that the volumes proposed for 2026–27 appear “on the higher side” and require a prudence check.
In its tariff order issued on Wednesday, the ERC noted that while the Discoms have projected an overall energy surplus for FY 2026–27, they have simultaneously proposed significant short-term purchases. It said energy balance must be assessed not only annually but also across intra-day and seasonal variations.
While accepting the Discoms’ explanation of peak-hour deficits and limited solar power availability during certain time blocks to an extent, the ERC said the scale of proposed purchases needs closer scrutiny.
On the practice of backing down thermal stations while procuring from the market, it said the principle of merit order dispatch must be followed. Short-term procurement should be undertaken only when economical or necessary to meet peak demand, and must be backed by block-wise analysis demonstrating that market prices are lower than the variable cost of backed-down stations, ensuring the overall cost to consumers is minimised.
The observations come after stakeholders raised concerns over utilities backing down generation and opting for market purchases. The ERC has directed Discoms to maintain comprehensive records of all short-term procurement, including transactions through power exchanges, and submit monthly reports to it. These records must also be produced during true-up proceedings for verification.
It added that while fixed cost liabilities under long-term power purchase agreements (PPAs) are unavoidable to an extent, creating persistent surplus that leads to backing down and additional burden on consumers is not desirable. Discoms have been advised to align long-term procurement planning with realistic demand projections.
On inter-state hydel allocations, the Commission said the issue remains unresolved and advised the state government to take it up with Andhra Pradesh and Odisha for Machkund Hydro Electric Project allocations, and with Andhra Pradesh and Karnataka for Tungabhadra Hydro Electric Project allocations. Discoms have been asked to follow up and submit a report.
The ERC also took note of complaints relating to inadequate maintenance of distribution infrastructure, including delays in replacing failed distribution transformers, sagging lines, overloaded transformers, damaged poles and safety risks.
Despite reported maintenance efforts, the persistence of such issues indicates the need for more proactive and preventive practices, the ERC said. It directed Discoms to carry out periodic inspections, strengthen preventive maintenance and ensure timely rectification of faults, while adhering to Standards of Performance and addressing complaints promptly.
The Commission noted that concerns over lack of awareness and ineffective functioning of Consumer Grievance Redressal Forums (CGRF) were raised again during public hearings, despite similar directions in the previous tariff order. It has asked Discoms and CGRFs to undertake wider awareness programmes through field offices and local bodies, and ensure adequate infrastructure and staffing. A compliance report must be submitted within a stipulated timeframe.
No tariff hike; ToD incentives revised
The ERC retained the existing retail supply tariff for 2026–27. However, it revised time-of-day (ToD) tariffs: an incentive of Rs 0.50 per unit will apply during 10 am to 6 pm, while peak-hour charges (6 am to 10 am and 6 pm to 10 pm) have been increased from Rs 1 to Rs 1.50 per unit. Normal tariffs will apply from 10 pm to 6 am.
The ex gratia for fatal electrocution of non-departmental persons has been raised from Rs 5 lakh to Rs 8 lakh with effect from April 1, 2026. Discoms must submit monthly, circle-wise reports on electrical accidents, causes, and compensation payments, including reasons for delays beyond two months.