Material procurements by DISCOMs: APERC to issue regulation or guidelines for curbing irregularities

In a significant move to keep the steep rise in the annual expenditure being incurred by the State power distribution companies (DISCOMs) under check and eliminate the scope for irregularities, Andhra Pradesh Electricity Regulatory Commission (APERC) in-charge chairman P. Venkata Rama Reddy expressed the intent to issue a regulation or comprehensive guidelines in three months, that would exercise greater control over procurements by DISCOMs to rid these transactions of corruption.

He was speaking at a public hearing on the DISCOMs’ Annual Revenue Requirement (ARR) filings for 2026-27 in Vijayawada on Thursday (January 22, 2026).

APERC approves true-up charges amounting to ₹4,498 crore

Responding to a complaint by the Centre for Liberty chairman and retired IPS officer A.B. Venkateswara Rao that the purchase of transformers by the SPDCL since 2022 was fraught with corruption and the costs thereof were sought to be imposed on the consumers in the form of true-up charges, Mr. Venkata Rama Reddy said he issued a detailed cost order in February 2025 on the basis of data secured from Karnataka, Telangana and Tamil Nadu and he did not act hastily even when asked to approve procurements at relatively high prices, saying that it required a detailed study. 

“However, since the APERC was under the obligation to crack down on unfair practices, the issues brought to his notice would be examined,” he asserted.

Also, Mr. Venkata Rama Reddy stated that so far the APERC did not pay much attention to the procurement of materials (which account for a sizeable chunk of the costs paid by the DISCOMs) but it was high time to do the necessary inquiries as the said practices could not be allowed. 

He further said the government never interfered with the functioning of APERC, while calling the government’s decision to absorb the true-up charges amounting to ₹4,478 crore approved in December in order not to pass on the costs to consumers as gracious.

Mr. Venkateswara Rao requested the APERC to disallow the costs claimed by the DISCOMs in their Annual Revenue Requirement filings for 2026-27, and maintained that the installation of Star-5 transformers in the farm sector should be completely avoided owing to their high cost. 

Basically, he raised strong objection to the procurement of well more than 90% of the transformers from Shirdi Sai Electricals Limited and the remainder from Toshiba Transmission & Distribution. By resorting to this unfair practice, competition from home-grown companies that would bring down costs was stifled even as the government scouted for investments abroad, he observed, appealing to the APERC to take appropriate action by invoking its full powers.