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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>
<p>Subscribe to Mercom’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’t miss any critical updates from the renewable industry.</p>



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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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