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Power tariff hike unlikely in Andhra for 2025-26 as state to bear discoms’ losses
The APERC held a three-day public hearing on Friday in Vijayawada and Kurnool cities regarding tariff proposals for the financial year 2025-26
Electricity consumers in Andhra Pradesh will be spared from increased power bills in the coming financial year 2025-26, as the state government on Friday conveyed to the AP Electricity Regulatory Commission (APERC) that it will bear the entire revenue deficit of the power distribution companies, people familiar with the matter said on Saturday.
The APERC concluded a three-day public hearing on Friday in Vijayawada and Kurnool cities regarding tariff proposals for the financial year 2025-26. During the public hearing, the discoms submitted the aggregate revenue requirement (ARR) for 2025-26, projecting a revenue deficit of ₹14,683 crore, which will be recovered from the consumers through increased power tariff.
However, the state government submitted the affidavit before the commission stating that it will offset the revenue deficit of the discoms by reimbursing the amount, so that the consumers will not be burdened by an increase in power tariff.
The state government reiterated its commitment to ensure uninterrupted power supply to residential, commercial, and industrial sectors and to provide nine hours of free quality electricity during the day to agriculture. The government also declared its intention to implement subsidies for electricity provided to aqua farmers, SCs, STs, and other groups.
Experts, representatives from different sectors, political parties, and public organisations offered several suggestions to the commission during the hearings. APERC will compile these suggestions and finalise the electricity tariff order, which will come into effect from April.
The power consumers in the state have already been burdened twice to the extent of nearly ₹15,000 crore during 2024-25 due to increase in power charges in the form of fuel and power purchase cost adjustment (FPPCA).
In October, the APERC ordered collection of ₹6,073 crore from the consumers towards the additional costs incurred by discoms for purchase of additional power in 2022-23 and again in November, it imposed a burden of another ₹9,412 crore for the additional power purchases during 2023-24.
The ARR reports filed by the discoms for 2025-26 does not include proposals for changes in electricity charges or category alterations. As the government has shown readiness to cover the deficit mentioned in the ARR, the commission might announce the tariff without any additional burden on consumers, an energy department official said.
According to the ARRs, the power utilities’ debts and losses have reached ₹1.01 lakh crore as of November 2024, with debts at ₹71,762 crore and losses at ₹29,377 crore. Despite being among the utilities with the lowest transmission and distribution losses in the country, state discoms are trapped in debt.
The official quoted above said the government aims to improve transparency in power purchases and reduce costs to rescue utilities. It plans to increase the production capacity of renewable energy, which is available at lower rates, and adopt energy-saving measures. “Efforts will also focus on reducing the gap between the average cost of supply and the average revenue realisation,” he added.
