APERC Sets Pooled Power Purchase Cost At ₹5.17/Unit For FY26, Directs DISCOM Adjustments In Andhra Pradesh

The Andhra Pradesh Electricity Regulatory Commission has issued a common order determining the pooled cost of power purchase for the financial year 2024–25. The Commission fixed the rate at Rs. 5.17 per unit, which will be applicable for the financial year 2025–26 under the state’s Renewable Power Purchase Obligation (RPO) regulations.

The order comes after petitions were filed by the state’s three major distribution companies—Southern Power Distribution Company of Andhra Pradesh, Central Power Distribution Corporation of Andhra Pradesh, and Eastern Power Distribution Company of Andhra Pradesh. These DISCOMs had proposed a pooled cost of Rs. 5.22 per unit. However, after reviewing detailed power purchase data, the Commission determined a slightly lower rate of Rs. 5.17 per unit.

The pooled cost of power purchase is an important regulatory benchmark. It represents the weighted average price at which a distribution licensee procures electricity from long-term conventional sources during the previous year. As per regulations, this calculation excludes renewable energy and power generated from liquid fuels. The final figure is also capped at either the weighted average cost or the average market purchase rate, whichever is lower.

During the review process, the Commission observed that the DISCOMs submitted their petitions with a delay of around six months, missing the original deadline of September 30, 2025. Despite this delay, the Commission condoned the lapse since no stakeholders raised objections and there was no financial impact on consumers. A public notice was issued in March 2026 seeking suggestions, but no comments were received before the final hearing held in Kurnool.

A major reason for the reduction in the proposed cost was the exclusion of certain power procurement expenses. The Commission removed costs related to central generating stations that did not have approved power purchase agreements. These included projects such as NTPC Kudgi Stage-I, NTPC Telangana STPS Stage-I, and expansions by NLC India Limited. In addition, transactions with TS NPDCL were also excluded as they did not meet the definition required under pooled cost calculations.

The final approved rate of Rs. 5.17 per unit is notably lower than the average market purchase rate of Rs. 6.69 per unit reported by the DISCOMs. The Commission has directed that any difference between provisional payments and the newly approved cost should be settled with power developers. These adjustments will be made in three equal monthly installments starting from the May 2026 billing cycle.

The order was issued under the leadership of P. V. R. Reddy, who directed the DISCOMs to ensure timely submission of future petitions, with the next deadline set for September 30, 2026.