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					</table><p>The Telangana Electricity Regulatory Commission (<a href="http://www.tgerc.telangana.gov.in/" target="_blank" rel="noopener">TGERC</a>) has granted Telangana Rythu Power Distribution Company (<a href="https://tgrpdcl.com/" target="_blank" rel="noopener">TGRPDCL</a>) a license to undertake the distribution and retail supply of electricity across the state.</p>
<p>The license covers agricultural consumers, lift irrigation scheme consumers, Mission Bhagiratha and Composite Protected Water Supply Program consumers, the Hyderabad Metropolitan Water Supply and Sewerage Board, and municipal water supply connections having separate distribution transformers.</p>
<p>The Commission granted the license under the fifth proviso to Section 14, read with Section 131 of the Electricity Act, 2003. The license will become effective only after the Telangana government issues a statutory transfer program under Sections 131(4) and 131(5) of the Act and TGRPDCL files an application under Schedule 2 of the Distribution License Regulations, 2016.</p>
<p>TGRPDCL’s business commencement date has been set at four months from the July 10, 2026, order, subject to fulfillment of the conditions and pre-commencement directions prescribed by the Commission.</p>
<p>The Commission also allowed the petitions filed by the Northern Power Distribution Company of Telangana (TGNPDCL) and the Southern Power Distribution Company of Telangana (TGSPDCL) seeking amendments to their distribution licenses. Their licenses will stand amended from the date TGRPDCL commences business, excluding the consumer categories assigned to the new DISCOM from their service obligations. Their geographical areas and obligations toward all other consumers will remain unchanged.</p>
<p><strong>Background </strong></p>
<p>The Telangana government <a href="https://www.mercomindia.com/telangana-issues-modalities-for-formation-of-third-discom" target="_blank" rel="noopener">approved</a> the formation of a third distribution company through an order dated December 17, 2025, to handle electricity supply to specified government-supported categories.</p>
<p>TGRPDCL, described as the Rythu (farmer) DISCOM, was subsequently incorporated on March 11, 2026.</p>
<p>TGRPDCL sought a statewide distribution license, proposing to serve agricultural, lift irrigation, and drinking-water programs, as well as municipal water connections. It planned to take over agricultural distribution transformers and downstream low-tension infrastructure from the incumbent DISCOMs, while using their 11 kV and 33 kV upstream networks through wheeling and service arrangements.</p>
<p>TGNPDCL and TGSPDCL separately sought amendments to their existing licenses to transfer the identified consumer categories to TGRPDCL.</p>
<p>Further, upon transfer of the identified network to TGRPDCL, the CAPEX requirements to meet future load growth and new connections will be detailed and addressed in the business plan submissions, in line with regulatory requirements.</p>
<p>The major CAPEX expenses of TGRPDCL would be related to the release of new service connections, the installation of transformer monitoring units, and network enhancements on an as-needed basis. The above CAPEX requirements are expected to be incurred in phases.</p>
<p>Stakeholders questioned whether a distribution license could legally be restricted to specified consumer categories, arguing that Section 43 of the Electricity Act imposes a universal obligation on a licensee to supply every eligible applicant in its area.</p>
<p>They also raised concerns about TGRPDCL’s absence of an independent end-to-end distribution network, its ₹50 million (~$519,890) initial capital, reliance on government subsidies, lack of a complete business plan, and dependence on incumbent DISCOMs for upstream infrastructure.</p>
<p>Stakeholders submitted that the Transfer Scheme, including the effective date for the transfer of assets and liabilities, has not yet been notified, and no definite timeline has been provided for the transfer of assets valued at ₹49.29 billion (~$512.51 million).</p>
<p>Further, they stated that the notification of the Transfer Scheme is essential for resolving issues relating to valuation, arrears, loans and operational transfer, and requested that it be notified with a defined effective date since assets.</p>
<p>Other objections concerned the proposed transfer of assets worth about ₹49.29 million (~$512.51 million), allocation of power purchase agreements, loss of cross-subsidy, employee deployment, interface metering, consumer data migration, grievance redressal, operational coordination, and the transfer of agricultural consumers without their individual consent.</p>
<p>TGRPDCL argued that the proposal was not competitive entry by an independent private licensee but a statutory restructuring of existing government-owned utilities.</p>
<p>The petitioner maintained that the new structure would improve agricultural energy accounting, subsidy transparency, financial discipline, infrastructure management and service quality. It also said the government would continue to support subsidized supply, provide additional equity when required, and maintain free electricity for agricultural consumers without installing individual meters on agricultural pump sets.</p>
<p><strong>Commission’s Analysis </strong></p>
<p>The Commission characterized the proposal as a further reorganization of an existing public electricity undertaking rather than the entry of a new market participant.</p>
<p>It noted that TGRPDCL would be entitled to recognition as a distribution licensee after the government issues the formal statutory transfer program. It therefore assessed the proposal as a restructuring under Section 131, rather than as a parallel-licensing application under the sixth proviso to Section 14.</p>
<p>The Commission noted that TGRPDCL will have a binding duty to supply consumers falling within its assigned categories, including consumers in remote or commercially unattractive areas. TGNPDCL and TGSPDCL will continue to serve all remaining categories, ensuring that no consumer is left without an identified supplier.</p>
<p>The Commission also rejected the claim that TGRPDCL must own a complete independent network before receiving authorization. It observed that agricultural DTRs, LT lines and associated last-mile infrastructure form part of a distribution system. Shared use of the incumbent DISCOMs’ upstream infrastructure is permitted under the state’s regulatory framework and will remain subject to Commission-determined wheeling charges and operational agreements.</p>
<p>Regarding financial capacity, the Commission said TGRPDCL’s ₹50 million (~$519,890) initial capital reflected its incorporation stage rather than its eventual operating scale. A final capital adequacy assessment will be undertaken after the business plan and asset-liability transfer arrangements are completed and before commencement.</p>
<p>The Commission directed TGRPDCL to submit a comprehensive business plan within three months.</p>
<p>TGRPDCL and the incumbent DISCOMs must execute transition memoranda, service-level agreements and bulk supply agreements within 60 days.</p>
<p>Pending final power purchase agreement (PPA) allocation, the incumbent DISCOMs will supply power to TGRPDCL under bulk supply arrangements. The three DISCOMs must also conduct a minimum three-month mock run of the proposed PPA allocation mechanism.</p>
<p>The Telangana government is expected to issue the statutory transfer scheme at least six weeks before commencement. Until TGRPDCL establishes its own consumer grievance redressal forums, the forums of TGNPDCL and TGSPDCL will continue handling complaints from transferred consumers.</p>
<p>Last month, TGERC <a href="https://www.mercomindia.com/telangana-power-regulator-clears-1-5-gwh-battery-storage-procurement" target="_blank" rel="noopener">approved</a> the procurement of 375 MW/1,500 MWh of battery energy storage capacity, proposed by distribution companies through the Telangana Power Generation Corporation, under the Viability Gap Funding program.</p>
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Telangana Power Regulator Approves Exclusive DISCOM for Farmers


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					</table><p>The Telangana Electricity Regulatory Commission (<a href="https://www.tgerc.telangana.gov.in/" target="_blank" rel="noopener">TGERC</a>) has approved the procurement of 375 MW/1,500 MWh of battery energy storage capacity, proposed by distribution companies (DISCOMs) through the Telangana Power Generation Corporation (<a href="https://tggenco.com/TGGENCO/home.do" target="_blank" rel="noopener">TGGENCO</a>), under the Viability Gap Funding (VGF) program.</p>
<p>The Maheshwaram battery storage project was awarded to Sarus Infrastructures at a tariff of ₹298,000 (~$3,151)/MW/month, discovered through competitive bidding. For the Choutuppal battery storage project, Coal India will pay ₹314,000 (~$3,319)/MW/month as the tariff.</p>
<p>The Commission also limited the trading margin payable to TGGENCO to 0.5% of the applicable capacity charges.</p>
<p>It allowed the DISCOMs to enter into Battery Energy Storage Purchase Agreements (BESPAs) with TGGENCO, while TGGENCO could sign BESPAs with the selected developers.</p>
<p><strong>Background </strong></p>
<p>The Southern Power Distribution Company of Telangana (<a href="https://tgsouthernpower.org/" target="_blank" rel="noopener">TGSPDCL</a>), on behalf of the state DISCOMs, filed a petition seeking consent to procure 1,500 MWh of battery storage capacity to be established by TGGENCO. TGGENCO separately sought approval to adopt tariffs for the projects.</p>
<p>The projects will be set up at two TGTRANSCO substations: 750 MWh at Maheshwaram and 750 MWh at Choutuppal.</p>
<p>The DISCOMs submitted that BESS is needed to manage peak demand, reduce deviations, absorb surplus renewable energy during solar hours, and reduce high-price open-market purchases.</p>
<p>Stakeholders raised objections on procedural sequencing, discovered tariffs, trading margin, standalone project location, cost-benefit assumptions, and the choice of a four-hour single-cycle configuration. They argued that the tariffs were high and TGGENCO’s intermediary role only added to the cost. They stressed that alternative configurations, such as two-hour multi-cycle systems, should have been studied.</p>
<p>The state DISCOMs and TGGENCO said the process was transparent, time-bound due to VGF requirements, and conducted through competitive bidding. They said the four-hour configuration was suited to Telangana’s demand pattern, solar surplus, and peak requirements.</p>
<p><strong>Commission’s Analysis </strong></p>
<p>The Commission said a direct comparison with projects in other states was not appropriate without considering storage duration, discharge capability, configuration, contractual obligations, and site-specific conditions. It found the discovered tariffs reasonable for comparable four-hour BESS projects.</p>
<p>The Commission accepted TGGENCO’s role as intermediary procurer, noting that the state government had designated it as the nodal agency for storage projects. However, it approved only a 0.5% trading margin.</p>
<p>It also accepted the standalone BESS configuration at 400-kV substations, noting that it would provide grid-level operational flexibility. It approved the four-hour single-cycle design for the present procurement but directed utilities to conduct detailed technical and economic studies for future BESS procurements.</p>
<p>The State Load Despatch Center was directed to monitor BESS operations, including charging and discharging patterns, utilization, availability, round-trip efficiency, degradation parameters, cost-benefit outcomes, and grid support, and submit periodic reports to the Commission.</p>
<p>Recently, TGERC <a href="https://www.mercomindia.com/telangana-amends-power-supply-code-to-mandate-18-interest-on-excess-billing" target="_blank" rel="noopener">issued</a> the Electricity Supply Code Third Amendment Regulation, 2026, requiring DISCOMs to pay 18% interest per annum on excess amounts outstanding due to incorrect billing.</p>
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Telangana Power Regulator Clears 1.5 GWh Battery Storage Procurement


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					</table><p>The Telangana Electricity Regulatory Commission (<a href="https://www.tgerc.telangana.gov.in/" target="_blank" rel="noopener">TGERC</a>) has approved amendments to the time-of-day (ToD) tariff structure for the Southern Power Distribution Company and the Northern Power Distribution Company.</p>
<p>Under the revised structure, the 22:00–06:00 ToD tariff over retail supply energy charges will be zero from December 1, 2025, to March 31, 2026, replacing the earlier ₹1.50 (~$0.017)/kWh that was applicable for April–November of the financial year (FY) 2025–26.</p>
<p>Surcharges of ₹1 (~$0.011)/kWh during the 06:00–10:00 and 18:00–22:00 peak time slots remain unchanged for the full FY 2026.</p>
<p>These ToD tariffs apply to HT-I(A) Industrial and Poultry, HT-II(A) Others, HT-II(B) Wholly Religious Places, HT-III (Airports, Railway Stations, Bus Stations), and HT-IX electric vehicle charging stations.</p>
<p><strong>Background</strong></p>
<p>The two power distribution companies (DISCOMs) had filed petitions in August 2025 seeking changes to the ToD tariffs approved earlier in the retail supply tariff. They requested that the existing night-time incentive be removed, citing higher power purchase costs during night hours, increased reliance on costlier thermal and market purchases, and delays in commissioning units of the Yadadri Thermal Power Station.</p>
<p>They argued that the incentive was resulting in significant revenue outflow and that daytime availability, particularly from solar sources, was substantially higher than nighttime availability.</p>
<p>Stakeholders raised objections on several grounds, including the maintainability of the petitions under Section 62(4) of the Electricity Act, 2003, which ordinarily restricts tariff amendments within a financial year.</p>
<p>They also stated that industries had already planned operations based on the announced tariff structure, that the ToD rebate would support demand-side management by encouraging nighttime usage, and that continuous-process industries would be adversely affected.</p>
<p>Some stakeholders contended that the existing ToD structure was essential for grid stability and that the DISCOMs had not provided adequate technical data to justify the change.</p>
<p>In response, the DISCOMs submitted that the proposal was their first amendment request for the financial year and therefore did not constitute a violation of Section 62(4). They reiterated that nighttime procurement costs were higher than daytime costs, that the rebate was no longer aligned with prevailing system conditions, and that detailed load curves, hourly power purchase data, and technical analyses were placed before the Commission.</p>
<p>The DISCOMs also pointed out that solar generation, comprising nearly 9,800 MW of utility-scale plus around 1,000 MW of rooftop solar, creates surplus daytime availability that can absorb load shifts from night hours.</p>
<p><strong>Commission’s Analysis</strong></p>
<p>The Commission observed that daytime energy availability exceeded demand, while nighttime procurement relied more on costlier sources. It noted that delays in the commissioning of Yadadri Thermal Power Station had reduced expected night-time availability, requiring additional market purchases.</p>
<p>It noted that the earlier incentive of ₹1.50 (~$0.017)/kWh during 22:00 to 06:00 had led to substantial revenue outflows for the DISCOMs. It found that daytime solar generation was sufficient to meet the morning and evening peaks, based on the submitted load curves.</p>
<p>The Commission noted that morning peaks occur around 08:00 and evening peaks around 17:00, both periods adequately served by daytime solar generation. The power purchase cost charts submitted by the DISCOMs showed that the cost per unit during the 22:00 to 06:00 time slot was consistently higher than during the 06:00 to 10:00 and 10:00 to 18:00 time slots.</p>
<p>The regulator held the amendment request did not violate Section 62(4), since the DISCOMs had sought no tariff revision during the original annual revenue requirement filing for FY 2026. It concluded that revising the ToD tariff was necessary to address the mismatch between availability and demand, contain revenue loss, and reduce dependence on high-cost power purchases.</p>
<p>The Commission added that continuing the ₹1.50 (~$0.017)/kWh rebate through March 2026 would result in major revenue deficits that would ultimately be passed on to consumers during the true-up process. It therefore viewed the amendment as both financially prudent and operationally justified.</p>
<p>Accordingly, the Commission approved the amendment to the ToD tariff. The rest of the tariff order issued in April 2025 also remains unaltered.</p>
<p>The Commission directed the DISCOMs to report the consequent revenue impact in their true-up petitions for FY 2026.</p>
<p>The Commission recently <a href="https://www.mercomindia.com/telangana-regulator-issues-rooftop-solar-regulations-2025-2/" target="_blank" rel="noopener">issued</a> the final regulations for grid-interactive rooftop solar, introducing a comprehensive framework governing metering for consumers in the state.</p>
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Telangana Removes Nighttime ToD Rebate for December–March Period


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					</table><p>Telangana State Electricity Regulatory Commission (<a href="https://tserc.gov.in/" target="_blank" rel="noopener">TSERC</a>) has imposed a penalty of ₹50,000 (~$599) on Southern Power Distribution Company of Telangana (<a href="https://www.tssouthernpower.com/" target="_blank" rel="noopener">TGSPDCL</a>) for failing to comply with a previous order mandating the settlement of unpaid energy bills and Late Payment Surcharges (LPS).</p>
<p>TGSPDCL had also not complied with the directions to open an irrevocable revolving Letter of Credit (LC) as per their Power Purchase Agreement (PPA) with Polepally Solar Parks, the petitioner in the case.</p>
<p>The Commission also ordered an additional ₹300,000 (~$3,597) to be paid to the petitioner.</p>
<p><strong>Background</strong></p>
<p>The petitioner, Polepally Solar Parks, is a generating company engaged in solar energy generation. It operates a 25 MW solar power project in Telangana, supplying electricity to TGSPDCL. Despite the Commission&#8217;s order directing TGSPDCL to make outstanding payments, including LPS, and to open an LC under their PPA, TGSPDCL did not comply.</p>
<p>The PPA, originally signed on May 29, 2014, and subsequently amended several times, mandates that payments should be made within 30 days from the meter reading date, with LPS applicable for delays.</p>
<p>In 2022, Polepally Solar Parks sought the following reliefs: compliance with the PPA provisions, immediate release of ₹267.93 million (~$3.21 million) in outstanding payments, payment of ₹71.3 million (~$855,141) in LPS for invoices raised before November 2020, timely future payments, and the opening of an irrevocable revolving LC.</p>
<p>In August 2022, the Commission directed TGSPDCL to settle unpaid energy bills and outstanding LPS within 45 days and put an irrevocable revolving LC in place. However, TGSPDCL did not do so. In December 2022, TGSPDCL said it would pay the principal amount in 12 installments.</p>
<p>Despite waiting beyond the stipulated timeline, Polepally Solar Parks observed a discrepancy of ₹24.8 million (~$297,422) in the outstanding principal amount and noted that LPS had not been accounted for.</p>
<p>The petitioner contended that the Commission is empowered to enforce its orders under Regulations 26 and 45.</p>
<p>Polepally Solar Parks emphasized that TGSPDCL&#8217;s delays had jeopardized its ability to service debts and affected the return on its investment. The distribution company had violated the commercial principles set out in Section 61 of the Electricity Act, 2003. Moreover, the situation undermined the promotion of renewable energy generation, contravening Section 86(1)(e) of the Act.</p>
<p><strong>Commission&#8217;s Analysis</strong></p>
<p>The Commission noted TGSPDCL&#8217;s failure to file a counter affidavit or provide updates on the payments due. Despite multiple opportunities, TGSPDCL did not present any substantial response, leading the Commission to presume non-compliance.</p>
<p>It acknowledged that TGSPDCL had partially complied by arranging to pay the principal amount. However, it failed to pay the LPS and open the LC.</p>
<p>The Commission ruled that it was imposing a penalty of ₹50,000 (~$599) on TGSPDCL for non-compliance with the 2022 order in its entirety.</p>
<p>It also reiterated the necessity for TGSPDCL to comply fully with the original order and directed an additional cost of ₹300,000 (~$3,597) to be paid to the petitioner to ensure justice.</p>
<p>&#8220;Under Section 142, a penal provision, a person is obligated to comply with commission orders and regulations. Non-compliance triggers penalties under this section, which has been seldom exercised by commissions. In a significant move, the Commission has now levied costs on distribution companies for unpaid invoices. The order mandates immediate clearance of pending invoices, a ₹50,000 (~$599) penalty for defying the Commission&#8217;s order, and payment of ₹300,000 (~$3,597) as additional costs to the petitioner to uphold fairness. This ruling aims to prevent distribution companies from delaying payments and misusing the PRAAPTI Portal to unjustly dispute invoices. It highlights the distribution company&#8217;s default in payment and restricts frivolous disputes.&#8221; said Aaditya K Singh, Partner at <a href="https://www.dentonslinklegal.com/en/" target="_blank" rel="noopener">Dentons Link Legal</a> and advocate for Polepally Solar Parks.</p>
<p>In June 2023, The Telangana power distribution companies (DISCOMs) <a href="https://www.mercomindia.com/discoms-sidestep-developers-approach-commission-amend-ppas" target="_blank" rel="noopener">filed</a> a petition with the Commission seeking its approval to amend the PPAs to shift the billing cycle for renewable energy projects from the 24th and 25th of each month to the 1st of the calendar month.</p>
<p>Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates </a>to ensure you don&#8217;t miss any critical updates from the renewable industry.</p>


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