The Telangana Cabinet has given the go-ahead to create a third electricity distribution company (DISCOM).

The new DISCOM will be responsible for the supply of power to farmers, lift-irrigation programs, beneficiaries of Mission Bhagiratha, street lighting, rural and urban public utilities, and various welfare programs.

Telangana now has two DISCOMs—Northern Power Distribution Company and Southern Power Distribution Company.

Modelled on Bengaluru’s system, Hyderabad will shift to a full underground electricity cable system at an estimated cost is ₹147.25 billion (~$1.65 billion). All utility cables—electricity, T-Fiber, and private network cables will be moved underground. The city will be divided into three power circles for its implementation.

The creation of the third DISCOM is aimed at strengthening the power sector by improving operational efficiency to ensure a reliable supply to essential public services.

The Cabinet also decided to procure 3,000 MW of solar power and 2,000 MW of power from pumped storage projects, with five-year supply contracts. Tenders for these projects will be issued soon.

The decision aims to reduce the burden on conventional power and support renewable energy integration.

The power from the pumped storage projects is intended to address peak-demand requirements and strengthen grid stability.

Power from these projects will be supplied to the state’s DISCOMs.

The government plans to permit the development of up to 10,000 MW of pumped storage capacity across the state to meet future needs.

It will allow industries to set up their own captive power projects, including renewable-based captive generation, and obtain the necessary approvals for power supply required for their operations.

The Cabinet decided that applications by industries for captive power generation will be approved immediately. There will be no capacity restrictions.

It also approved granting government guarantees for GHMC (Greater Hyderabad Municipal Corporation) to support electricity-related financial commitments. This includes guarantees for power sector dues and other related obligations.

It reviewed power supply requirements for urban infrastructure, including housing, public amenities, and ongoing development programs.

In January 2025, Telangana finalized its renewable energy policy for 2025, planning to add 20,000 MW of renewable energy and storage capacity additions by 2030. The policy will be valid until 2035. The state targets installing 30.54 GW of renewable energy from solar, wind, energy storage, and distributed sources by the financial year (FY) 2030 and 47.06 GW by FY 2035.

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