The Telangana Electricity Regulatory Commission (TGERC) has approved the procurement of 4,000 MW of solar power and the associated power purchase agreements (PPAs) from projects under Component-A of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM).

Background

The Southern and Northern Power Distribution Company of Telangana filed a petition seeking approval to procure 4,000 MW of solar power under Component-A of the PM-KUSUM program for 25 years.

The Commission conducted a public hearing held on April 17, 2025, attended by 77 stakeholders. Of these stakeholders, 20 submitted their feedback.

A key concern was that the Ministry of New and Renewable Energy initially approved allocating 4,000 MW of decentralized solar power under Component-A of PM KUSUM, but later revised it to 1,000 MW.

Concerns were also raised about challenges in identifying sufficient land to set up substations for larger capacities. Some stakeholders suggested a revision of the prefixed tariff of ₹3.13 (~$0.037)/kWh due to increased project costs, currency depreciation, and financing challenges.

Another concern was about the capacity utilization factor (CUF) of 19%, which stakeholders said was excessive given Telangana’s solar conditions. They sought a more attainable CUF target or flexible penalties.

The stakeholders also requested the Commission grant the expression of interest (EoI) and the Model Lease Agreement to procure the 4,000 MW of decentralized power.

Commission’s Analysis

TGERC acknowledged the stakeholders’ concerns about capacity, land allocation, and the tariff issue. It maintained the prefixed levelized tariff, emphasizing that tariff stability will avoid disrupting ongoing projects.

It observed that since modifying tariffs might disturb stakeholders, it postponed any adjustments.

The Commission also found that Telangana will face an energy deficit from the financial year (FY) 2028 onwards. It noted that although the state had a surplus for FY 25 and FY 26, it was only available in certain blocks.

Regarding procedural and implementation challenges, the Commission directed Telangana Renewable Energy Development Corporation (TGREDCO) and the state’s distribution companies (DISCOMs) to prepare and publish the ‘frequently asked questions’ and ‘standard operating procedures’ addressing all raised issues in English and Telugu on their websites.

It also encouraged forming coordination committees and single-window clearance systems to streamline project implementation and support farmers effectively. The Commission noted that TGREDCO would convene meetings with solar power generators to clarify concerns.

The Commission highlighted the necessity for a comprehensive strategy concerning substation capacity allocation and instructed the DISCOMs to implement measures to effectively absorb generated power, minimize reverse power flow, and ensure grid stability.

TGERC approved the procurement of 4,000 MW solar power and the associated PPAs while denying post-facto approval for the EoI and the Model Lease Agreement since it is outside its jurisdiction.

In December last year, TGERC issued a comprehensive procedure for verifying the status of captive power-generating projects and their associated captive users within the state.

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