TGERC Approves Third DISCOM To Strengthen Agricultural Power Distribution In Telangana

The Telangana Electricity Regulatory Commission (TGERC) has approved the establishment of Telangana Rythu Power Distribution Company Limited (TGRPDCL) as the state’s third electricity distribution company, introducing a significant change to Telangana’s power distribution system. The decision was issued through a common order dated July 10, 2026, covering three related petitions, including TGRPDCL’s application for a new distribution licence and requests from Northern Power Distribution Company of Telangana Limited (TGNPDCL) and Southern Power Distribution Company of Telangana Limited (TGSPDCL) to amend their existing licences.

TGRPDCL has been created by the Telangana Government to provide electricity exclusively to government-supported consumer categories. These include agricultural consumers, Lift Irrigation Schemes (LIS), Mission Bhagiratha and Composite Protected Water Supply Scheme (CPWS) consumers, Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB), and municipal water supply connections that have dedicated distribution transformers. The company submitted its application for a distribution licence on April 6, 2026, under the provisions of the Electricity Act, 2003, and the Distribution Licence Regulations, 2016.

The proposed restructuring generated considerable public interest. TGERC invited objections and suggestions from stakeholders through public notices, receiving numerous responses. A public hearing was held on May 29, 2026, where participants raised concerns about several aspects of the proposal. These included whether a licence could legally be granted for selected consumer categories, the absence of an independent distribution network, financial viability, staffing arrangements, power purchase agreements, and consumer service responsibilities.

In response, TGRPDCL stated that the new utility would improve operational efficiency, increase financial transparency, strengthen energy accounting, and ensure better quality electricity supply for agricultural and related consumers. The company also clarified that the new arrangement would make use of existing infrastructure instead of creating duplicate distribution networks.

After reviewing all submissions and hearing the stakeholders, TGERC concluded that the restructuring is permitted under the Electricity Act, 2003. The Commission stated that TGRPDCL would function as a dedicated distribution licensee for the identified consumer groups while initially relying on service agreements with TGNPDCL and TGSPDCL for the operation and maintenance of the upstream 11 kV and 33 kV network during the transition period.

The Commission directed TGRPDCL to submit a detailed business plan within three months. The plan must include projections for future electricity demand, power purchase allocation, interface metering arrangements, capital requirements, strategies to reduce distribution losses, and other technical and financial details before the company starts full-scale operations.

TGERC also instructed TGRPDCL, TGNPDCL, and TGSPDCL to sign transition agreements and bulk power supply agreements. In addition, the three utilities must conduct a three-month mock run of the proposed power purchase allocation system to ensure a smooth transition. These steps are intended to maintain uninterrupted power supply while facilitating the transfer of assets, consumer records, and operational responsibilities.

Under the final order, TGERC granted the distribution licence to TGRPDCL under Sections 14 and 131 of the Electricity Act, 2003. The licence will become effective after the Telangana Government issues the required statutory transfer scheme and the company completes all regulatory requirements. The Commission also approved amendments to the licences of TGNPDCL and TGSPDCL by removing the specified consumer categories from their service obligations while keeping their existing geographical service areas unchanged. TGRPDCL is expected to begin operations four months after the order, subject to fulfilling all pre-operational conditions.