The Andhra Pradesh Electricity Regulatory Commission (APERC) has issued a draft framework for resource adequacy planning to ensure that electricity demand in the state is met reliably while maintaining an optimal mix of generation resources.

The draft APERC (Framework for Resource Adequacy) Regulation, 2026, lays out a structured process for forecasting demand, planning generation capacity, strengthening transmission and distribution networks, and procuring adequate resources to meet projected electricity needs.

Stakeholders can submit their feedback by March 27, 2026.

Applicability

The regulation will apply to all entities connected to the state grid, including:

• Generating companies
• Distribution licensees
• The State Load Dispatch Centre (SLDC)
• The State Transmission Utility (APTRANSCO)
• Other stakeholders connected to the state grid

The draft regulation states that it will override earlier APERC regulations and guidelines, including those on load forecasting, resource planning, and power procurement, to the extent that they are inconsistent with the new framework.

Rolling Ten-Year Resource Planning

Distribution companies will be required to undertake a rolling resource adequacy planning exercise covering a ten-year horizon, which must be updated every year.

The planning process will include multiple components:

• Demand assessment and forecasting
• Generation resource planning
• Transmission network expansion planning
• Distribution network strengthening
• Power procurement planning
• Monitoring and compliance

Distribution companies must prepare three types of plans:

• Long-Term Distribution Resource Adequacy Plan (LT-DRAP) covering ten years
• Medium-Term Distribution Resource Adequacy Plan (MT-DRAP) covering up to five years
• Short-Term Distribution Resource Adequacy Plan (ST-DRAP) covering one year

These plans must demonstrate how utilities intend to meet projected demand, their contribution to the national peak demand, and the mix of long-term, medium-term, and short-term contracts to be used to secure the required capacity.

For planning purposes, distribution companies may demonstrate 100% resource tie-up for the first year and at least 90% tie-up for the second year, based on contracted resources.

Demand Forecasting

The draft regulation requires distribution companies to develop detailed demand forecasts using scientific modelling tools and data-driven methods.

Forecasting must be conducted at hourly or sub-hourly intervals and may use techniques such as:

• Time-series analysis
• Econometric modelling
• Artificial intelligence or machine learning methods
• Artificial neural networks
• Autoregressive integrated moving average models
• End-use or hybrid forecasting approaches

Utilities must account for a wide range of variables in their forecasts, including weather conditions, economic activity, demographic trends, tariff changes, agricultural demand patterns, electric vehicle adoption, distributed energy resources, open access consumption, and demand-side management programs.

Distribution companies will also be required to maintain extensive historical datasets, including demand, consumer categories, load curves, and open access usage, to support forecasting and planning exercises.

Planning Reserve Margin

To ensure system reliability, distribution companies will be required to maintain a Planning Reserve Margin, representing capacity available above projected peak demand.

The reserve margin will be determined using reliability indicators such as Loss of Load Probability and Normalized Energy Not Served.

Utilities may propose higher reserve margins if required, subject to the Commission approval.

Capacity Credit Framework

The draft regulation introduces a capacity credit framework to determine the share of a power project’s installed capacity that can be counted toward resource adequacy requirements.

Capacity credit will vary depending on the technology and its reliability contribution to the grid.

For renewable resources such as wind and solar, capacity credit will be calculated using a net-load methodology based on generation during the top 250 net-load hours of the year.

Hydropower capacity credit will depend on water availability, while thermal power project credit will account for factors such as fuel availability and historical outage rates.

Procurement Mix

Distribution companies will be required to design procurement strategies that balance reliability, cost efficiency, and renewable energy integration.

The procurement mix may include:

• State and central generating stations
• Independent power producers
• Renewable energy projects
• Captive power projects
• Power exchanges and bilateral market transactions
• Energy storage systems such as battery storage and pumped storage projects

The regulation emphasizes the need for utilities to place greater emphasis on long-term and medium-term contracting while also ensuring that excess capacity does not impose unnecessary costs on consumers.

Procurement from renewable sources such as solar, wind, hybrid, firm and dispatchable renewable energy, or round-the-clock power must follow tariff-based competitive bidding guidelines issued by the Ministry of Power.

Distribution companies must also meet renewable purchase obligations in accordance with applicable regulations or national renewable consumption targets, whichever is higher.

New Capacity Procurement

The draft regulation requires prior Commission approval for new capacity arrangements or tie-ups.

Distribution companies must also obtain Commission approval before entering into new or amended long-term or medium-term power purchase agreements, power supply agreements, or power sale agreements.

In emergency situations affecting grid stability, utilities may undertake short-term procurement without prior approval but must report such transactions to the Commission within 15 days.

Short- and medium-term procurement may be carried out through platforms such as the Discovery of Efficient Electricity Price portal, the PUSH portal, or through power exchanges.

Storage and Flexible Generation

Recognizing the increasing share of renewable energy in the grid, the draft regulation encourages the deployment of energy storage technologies, including battery energy storage systems and pumped storage projects.

The regulation also requires state thermal generating companies to operate their projects flexibly so that they can ramp output up or down quickly in response to fluctuations in net demand.

Monitoring and Compliance

The Commission proposes mechanisms to monitor compliance with resource adequacy requirements.

Distribution companies that fail to meet their resource commitments may incur non-compliance charges, while utilities that demonstrate improvements in reliability and cost efficiency may be eligible for performance-based incentives.

The Commission will review compliance annually.

Implementation Timeline

The draft regulation sets out a detailed timeline for annual planning activities.

Distribution companies must submit electricity consumption data to the SLDC by April 21 each year. The SLDC will then aggregate the data and submit state-level forecasts to national agencies, including the Central Electricity Authority and the National Load Dispatch Centre.

Subsequent milestones include preparing national and state demand projections and allocating each distribution company’s share of national peak demand.

Distribution companies must submit their resource adequacy plans to the Commission by October 30 each year or within 15 days of receiving planning inputs from the Central Electricity Authority, whichever is earlier.

The Commission will review and approve these plans within 60 days.

Institutional Requirements

The draft regulation also introduces transparency and institutional measures.

Distribution companies and the SLDC will be required to publish periodic information on power procurement, power sales, and generator schedules on their websites. The SLDC must also publish the monthly merit order dispatch stack.

Distribution companies must establish a dedicated resource adequacy planning cell within three months of the regulation coming into force. They must also create a round-the-clock power purchase-and-sale cell responsible for monitoring market conditions and managing procurement.

Utilities must develop operating guidelines for these cells and submit them to the Commission.

Grid Resilience and Cybersecurity

The draft regulation includes provisions to strengthen cybersecurity and grid resilience.

Utilities will be required to implement cybersecurity and data protection policies, including network segmentation and access control systems.

Entities must also prepare disaster management and resilience plans to maintain grid stability during cyber incidents, natural disasters, or major equipment failures, including provisions for black-start capabilities, islanding schemes, and rapid restoration of critical loads.

Recently, the Rajasthan Electricity Regulatory Commission issued the draft Framework for Resource Adequacy Regulations, 2026, proposing a structured mechanism for resource adequacy planning to support future power security in the state.

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