No Hike in Electricity Tariffs: ERC Clarifies
Government to Bear ₹13,499 Crore Deficit, Relieving Consumers of Additional Burden
Hyderabad, April 29, 2025: The Electricity Regulatory Commission (ERC) has confirmed that there will be no increase in electricity tariffs in the state. After completing a public hearing on the Aggregate Revenue Requirement (ARR) proposed by power distribution companies (Discoms), the ERC reduced the proposed ₹65,849.74 crore by ₹7,221.65 crore, approving ₹58,628.09 crore. With the state government agreeing to cover the ₹13,499.41 crore deficit faced by Discoms, consumers have been spared additional financial burden.
Speaking to the media on Tuesday, ERC Chairman Justice Devaraju Nagarjun revealed that the state has 1.9 crore electricity consumers, including 1.37 crore domestic users, 29.15 lakh agricultural connections, 19.89 lakh commercial connections, and 4.5 lakh industrial connections. He clarified that no tariff hikes would be imposed across any sector.
Government Steps in to Cover Deficit
The Discoms had proposed an ARR of ₹65,849.74 crore for 2025-26, but the ERC, after scrutiny, approved ₹58,628.09 crore. The Discoms are expected to generate ₹45,710.05 crore through electricity charges, leaving a deficit of ₹13,499.41 crore. The state government has committed to covering this shortfall, as confirmed in a written submission to the ERC. As a result, consumers will not face increased tariffs, and a new tariff structure has been announced without any hike.
Cuts in Proposed Expenditure
The Discoms had proposed ₹50,571.82 crore for power purchases and ₹9,341.50 crore for distribution costs, which the ERC scaled down to ₹45,350.33 crore and ₹7,644.85 crore, respectively. The ERC revised estimates due to delays in the Yadadri project, where only one unit has been operational since January 2025, with others scheduled for commissioning by January 2026. The ERC also rejected inflated agricultural consumption estimates by Discoms, determining sales scientifically after studying practices in other states.
Subsidies by the Government
The state government will provide ₹11,602.60 crore in subsidies for 29.15 lakh agricultural connections. Additionally, under the Gruha Jyothi scheme, 50.52 lakh domestic consumers will receive free electricity up to 200 units, with a subsidy of ₹1,896.81 crore. In total, the government will fund ₹13,499.41 crore to support Discoms.
Future Demand and Challenges
Justice Nagarjun highlighted the surging power demand, with peak demand reaching 17,162 MW on March 20, 2025, surpassing central estimates. He cautioned that a power deficit could emerge by 2033-34. With the central government promoting renewable energy under the Paris Agreement’s net-zero goals, the state is encouraging solar projects to meet future needs.
Discoms’ Financial Struggles
Since 2014, Discoms have been in poor financial health, with pending bills from government entities exceeding ₹20,000 crore, Justice Nagarjun noted. He urged Discoms to reduce transmission losses and address issues like transformer failures and electrocution incidents. The ERC suggested increasing compensation for electrocution deaths from ₹5 lakh to ₹10 lakh and emphasized the need for consumer awareness programs.
This decision ensures that Telangana’s consumers are shielded from tariff hikes, with the government stepping in to stabilize the power sector.
