Telangana: DISCOMs likely to submit revenue requirement for 2025-26 to ERC by November end

The TGNPDCL and TGSPDCL have to file the ARR before the TGERC by the end of this month so that the ERC could give order on the tariff by the end of March

Hyderabad: In the wake of the Telangana State Electricity Regulatory Commission (TGERC) imposing a fine of Rs. 1.5 crore on State-run power distribution companies for not submitting the Annual Revenue Requirement (ARR) report within the deadline last time(2024-25), the two distribution companies have reportedly started preparing the ARR report for the next financial year (2025- 26), so that it could be submitted on time.

The Northern Power Distribution Company of Telangana Limited(TGNPDCL) and Southern Power Distribution Company of Telangana Limited(TGSPDCL) have to file the ARR before the Telangana State Electricity Regulatory Commission (TGERC) by the end of this month so that the ERC could give order on the tariff by the end of March.

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The ERC recently issued orders for the ARR submitted by the two DISCOMs for the current financial year. Since the ARR would be valid for just next five months, the power utilities have started preparing fresh ARR for the financial year 2025-26.

However, filing the ARR report to the TGERC for the next financial year would be a tightrope walk for the power distribution companies as the local body elections are likely to be held in January or February, it is doubtful whether the government will allow the ARR report to be submitted to the ERC with proposals for revision of electricity charges.

In the last financial year (2023-24), Southern and Northern DISCOMs incurred losses of Rs. 4,909.53 crore and Rs. 1,835.22 crore respectively, and the officials are estimating that that there will be a deficit of up to Rs. 10,000 crore during the current financial year between the revenue and expenditure of the discoms.

In the ARR, the DISCOMs need to provide details of the expenditure they have to incur on purchasing the power, on maintaining the distribution and transmission systems, on the salaries of the employees, interests to be paid to the banks, on the loans being taken and others.

The Commission reviews the proposals and holds the public hearings and determines the tariff to be collected on the sale of power. The activity begins in November and ends by March. The new tariff order comes into implementation from April 1 of the following year.

The DISCOMs are being provided with a tariff subsidy by the government for the free power to farmers. They also get revenue from the government departments for the power they supplied to them. In order to pay the amounts to the power generation companies, the DISCOMs have to realise the amounts from the sale of power to the consumers, to government departments and the subsidies of the government.