In a significant move ahead of crucial local body elections, Telangana's power distribution companies (discoms) have formally requested regulatory approval for their financial plans for the fiscal year 2026-27 without proposing any increase in electricity tariffs. This decision shifts the immense financial burden of covering a projected revenue shortfall entirely onto the state government.
A Massive Revenue Gap Without Consumer Burden
The southern and northern power distribution companies submitted their Aggregate Revenue Requirement (ARR) proposals to the Telangana Electricity Regulatory Commission (TGERC). The filings reveal a staggering combined revenue deficit of ₹22,104 crore for the 2026-27 financial year. Despite this huge gap, the discoms have not sought a tariff hike, a directive understood to have come from the state government in view of the upcoming municipal, zilla parishad, and Greater Hyderabad Municipal Corporation (GHMC) elections expected in the coming months.
Official sources confirm that the government has made it clear to the utilities that domestic consumers, in particular, should be shielded from any price rise. The state has indicated its willingness to bear the financial burden arising from this revenue gap. However, as part of the regulatory process, the TGERC must receive a formal commitment from the state government to fill this deficit before it can approve the ARR.
Breaking Down the Discoms' Financial Projections
The financial projections from each discom paint a clear picture of the challenge. The Telangana Southern Power Distribution Company Limited (TGSPDCL) has estimated its total revenue requirement at ₹50,242 crore. A massive ₹38,492 crore of this is earmarked for power purchase costs to ensure an uninterrupted electricity supply. The utility expects to earn ₹40,659 crore from existing tariffs and sales, leaving a substantial revenue gap of ₹9,583 crore.
On the other hand, the Telangana Northern Power Distribution Company Limited (TGNPCDCL) has projected a total requirement of ₹22,754 crore, with ₹16,075 crore needed for power purchases. Its expected revenue from tariffs is only ₹10,172 crore, resulting in a larger deficit of approximately ₹12,521 crore. Both discoms estimate that about 1.13 lakh million units of power will be available from state, central, and private sources to meet demand.
Public Hearings and A Structural Shift
The TGERC will now follow a transparent regulatory process, inviting public objections and suggestions. Public hearings have been scheduled for March 5 and 7, 2025. The hearing for the northern discom will be held in Hanumakonda, while the southern discom's hearing will take place in Hyderabad.
In a related structural change, from April 1, 2024, power supply for agriculture and water schemes will be shifted to a new, third distribution company. The state government will provide the required subsidy for this segment directly. This move is aimed at streamlining operations and ensuring targeted subsidy delivery.
The current financial exercise underscores the state government's political commitment to avoiding tariff hikes, especially with elections on the horizon. It also highlights the continuing heavy reliance on state subsidies to bridge the gap between the cost of supplying power and the revenue collected from consumers, a central challenge for power sector finances in Telangana.
