TGERC Approves 2,545 MW Solar Power Procurement At Tariffs Starting At INR 2.37/kWh In Telangana

The Telangana Electricity Regulatory Commission (TGERC) has approved the procurement of 2,545 MW of solar power by the Southern Power Distribution Company of Telangana Limited and the Northern Power Distribution Company of Telangana Limited (TGDISCOMs). The Commission has also formally adopted the tariffs approved by the Central Electricity Regulatory Commission (CERC) for power procurement from NTPC, NTPC Renewable Energy Limited (NTPC REL), NHPC and the Solar Energy Corporation of India (SECI).

The total approved capacity comprises 1,045 MW from NTPC and NTPC REL and 500 MW from NHPC under the Central Public Sector Undertaking (CPSU) Scheme Phase-II Tranche-III. An additional 1,000 MW will be procured from SECI under the Inter-State Transmission System (ISTS) Tranche-IX. The power procurement agreements for these projects were signed between December 2021 and March 2023. TGERC had initially granted in-principle approval in October 2022, while the distribution companies subsequently approached the Commission for final tariff adoption following CERC approvals.

The Commission initiated a public consultation process after issuing a public notice in August 2026. During the proceedings, a stakeholder raised concerns regarding project commissioning delays, increasing procurement costs, transmission infrastructure readiness, trading margins and changes in Goods and Services Tax (GST) rates. The stakeholder argued that delays in project implementation had affected the original objective of ensuring timely solar power supply to the state.

According to the submissions, approximately 1,256.7 MW out of the total 2,545 MW capacity remained uncommissioned by late 2025. Concerns were also raised about the financial impact of GST rate revisions from 5% to 12%, the application of ISTS charges under General Network Access (GNA) regulations and the additional trading margin of ₹0.07 per kWh payable to intermediary procurers. The stakeholder suggested that Telangana should also explore decentralised solar power procurement within the state to reduce transmission-related expenses and financial burdens on consumers.

Responding to these concerns, TGDISCOMs informed the Commission that 1,745 MW of the contracted capacity had already been commissioned and power supply had commenced by late September 2026. They explained that delays affecting the remaining projects were primarily linked to transmission connectivity constraints. These circumstances had also been recognised through force majeure extensions granted by the Ministry of New and Renewable Energy (MNRE).

The distribution companies further stated that the applicable trading margins and tariff arrangements were consistent with Ministry of Power guidelines and CERC regulations. After examining the submissions and relevant regulatory provisions, TGERC approved the power usage and sale agreements under Section 21(4) of the Telangana Electricity Reform Act, 1998, and Section 86(1)(b) of the Electricity Act, 2003. The Commission also adopted the CERC-approved tariffs under Section 63 of the Electricity Act, 2003.

The approved base tariff for electricity procured from NTPC and NHPC projects stands at ₹2.45 per kWh. For SECI-linked projects, the approved tariffs range between ₹2.37 and ₹2.38 per kWh, along with an additional trading margin of ₹0.07 per kWh.

Regarding GST-related financial adjustments, the Commission directed TGDISCOMs to make provisional payments towards the Change in Law compensation approved by CERC. This adjustment takes the provisional usage charges to ₹2.57 per kWh. However, the compensation will be subject to subsequent reconciliation and must be restricted to the actual GST paid, supported by auditor certification.

TGERC also directed the distribution companies to pursue the continuation of ISTS charge waivers for projects commissioned after June 30, 2025. The DISCOMs must closely monitor the commissioning of the remaining capacity and ensure that additional financial liabilities or transmission losses resulting from developer-side delays are not unfairly transferred to electricity consumers.