The Andhra Pradesh Electricity Regulatory Commission (APERC) has approved the state distribution companies’ performance review petitions for the financial year (FY) 2025, allowing limited changes to future resource plans, such as revisions to demand, sales, and energy requirements, based on actual performance.

The order is in response to the petition filed by Southern Power Distribution Company of Andhra Pradesh (APSPDCL), Andhra Pradesh Central Power Distribution Corporation (APCPDCL), and the Eastern Power Distribution Company of Andhra Pradesh (APEPDCL).

Some stakeholders had flagged concerns about demand, costs, and project delays during a public hearing on the petitioners’ performance. However, the Commission found the performance mostly satisfactory.

Background

APSPDCL, APCPDCL, and APEPDCL filed a petition with the Commission to report their actual performance for FY 2025, and compare it with earlier estimates.

The DISCOMs procured 7,000 MW of solar power from the Solar Energy Corporation of India (SECI). However, they claimed that the project timelines were delayed due to the lack of readiness of the interstate transmission system infrastructure. Supply of this power is now expected by May 2029.

They proposed some changes to the Resource Plan for FY 2026-27, outlining how distribution companies (DISCOMs) would meet future electricity demand, including power procurement, capacity additions, and investor requirements.

These suggestions included revising the demand and energy requirement estimates, adjusting power procurement plans, delaying some project timelines, and modifying capital expenditure by increasing future investments and carrying forward unfinished works. The petitioners proposed using renewable energy certificates (RECs) mainly to meet their renewable consumption obligation (RCO) targets.

In January 2026, APERC issued a public notice inviting comments on the petitions filed by the DISCOMs. Stakeholders raised concerns about delays in solar projects, excess renewable energy procurement, data transparency, and high capital expenditure plans. They questioned the demand projections, the surplus power assessment, and the REC pricing.

The stakeholders also expressed concerns over lower-than-expected electricity sales and demand.

The DISCOMs stated that the project delays were due to transmission issues beyond their control and that they had followed existing agreements. They said that renewable procurement met regulatory requirements and that the data was already disclosed in their filings. The DISCOMs stated that the REC pricing reflected market trends and that higher capital spending was due to new programs, delays, and pending projects.

Commission’s Analysis

The Commission noted that the DISCOMs’ performance variations were reasonable and had already been considered in earlier tariff orders; they did not require further review.

The Commission also highlighted certain provisions in the SECI project agreements. However, it observed that the power sale and purchase agreements require solar power developers to set up manufacturing facilities within a specified timeline, failing which a tariff reduction of ₹0.18 (~$0.002)/kWh would apply.

APERC directed the DISCOMs to report on solar manufacturing commitments linked to tariffs. The DISCOMs’ compliance with renewable energy targets was satisfactory. The Commission noted the proposed changes to capital expenditure. It stated that the changes were too premature and future spending would be reviewed later based on actual progress and true-up filings.

The Commission observed that the delays in solar projects were primarily due to transmission issues, not to any issues with the project developers.

The regulator said the DISCOMs were compliant with RPO/RCO obligations and needed no further directions. It also noted that concerns about renewable compliance and RECs had already been addressed in earlier Commission orders.

The Commission permitted limited adjustments already included in earlier tariff orders, such as updates to demand, sales, and energy requirement estimates based on actual performance.

This March, APERC issued a draft framework for resource adequacy planning to ensure that the state’s electricity demand is reliably met while maintaining an optimal mix of generation resources.

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