KURNOOL: In a stunning regulatory rebuke that underscores the power of public advocacy, the Andhra Pradesh Electricity Regulatory Commission (APERC) has exposed massive financial irregularities in the state’s power sector, forcing distribution companies to refund ₹923 crore to consumers instead of granting their demand for an additional ₹2,758 crore.
The landmark order dated September 27, 2025, reveals how DISCOMs sought to extract more money from consumers despite sitting on massive over-collections, with APEPDCL alone having over-collected a staggering ₹1,435 crore through inflated fuel charges.
The Commission’s investigation, prompted by vigorous arguments from consumer advocacy groups and industrial associations, uncovered that the DISCOMs’ claims were built on a foundation of imprudent spending, questionable accounting practices, and fundamental failures in electricity demand forecasting.
The Audacious Demand That Backfired
In an extraordinary display of financial audacity, the three DISCOMs —APSPDCL, APCPDCL, and APEPDCL— approached the regulator seeking permission to collect an additional ₹2,758 crore from consumers. This demand came after they had already collected ₹2,787 crore through a provisional fuel surcharge throughout FY 2024-25, which included a massive ₹1,435 crore over-collection by APEPDCL alone. Their official claim is “uncontrollable market forces had driven their power purchase costs beyond projections.”
This claim, however, quickly began to unravel when the Commission made the petitions public, triggering a wave of objections from 11 stakeholders, including heavyweight industrial groups and seasoned activists. Their collective arguments painted a picture of profound dysfunction.
The objectors, including M. Venugopala Rao (Senior Journalist), CPI(M) Leaders Ch. Baburao & Kandarapu Murali, FAAPCI, SICMA, AP Textile Mills Association, Amara Raja Energy & Mobility, M. Thimma Reddy (People’s Monitoring Group on Electricity Regulation), and M.V. Anjaneyulu (Vidyut Viniyogadarula Aikya Vedika), dismantled the DISCOMs’ claims piece by piece.
The Truth Emerges
The findings pointed not to uncontrollable costs, but to controllable inefficiencies:
The Phantom Cost of Inefficiency: The most damning revelation was that DISCOMs had backed down 13,615 MU of cheaper thermal power— paying fixed charges for these idled plants— while simultaneously going to the market to buy 5,283 MU of far more expensive short-term power. Objectors argued this wasn’t a cost to be passed on, but a colossal failure of power scheduling and procurement.
The APEPDCL Shell Game: Objectors exposed that one DISCOM, APEPDCL, had actually over-collected and owed its consumers a massive refund. They alleged the unified petition was a “misleading” attempt to use APEPDCL’s surplus to camouflage the financial gaps in the other two DISCOMs, thereby denying consumers their rightful refund.
Billing Penalties as Costs: The DISCOMs had included claims for ₹392 crore in Late Payment Surcharges (LPS)— penalties for their own delayed payments to generators— and other deviation charges, presenting them as routine power purchase costs.
The Lies Unravel
The APERC’s inquiry confirmed the objectors’ suspicions. The regulator’s order systematically dismantled the DISCOMs’ claims, disallowing a staggering ₹646.49 crore as inadmissible. The breakdown was a direct indictment of their operations:
- ₹337 crore was disallowed for buying power from unapproved sources, a direct violation of the Commission’s directives.
- ₹143.4 crore was chopped for imprudent short-term purchases and penal charges.
- ₹205.69 crore was disallowed from APSPDCL alone for its failure to control technical losses.
Furthermore, the Commission found that the DISCOMs had significantly over-estimated electricity demand. Actual sales were 4.6% lower than projected, meaning they had collected revenue based on a level of consumption that never occurred. This sales shortfall was the final blow to their case for more money.
The Great Refund
In a decisive move, the APERC enforced a uniform refund across the state. Every consumer will receive approximately 13.3 paise per unit back on their bills over the next 12 months, starting in November 2025.
The order also served as a stern warning for the future. The Commission explicitly banned the DISCOMs’ practice of blindly collecting 40 paise per unit each month, ordering them to calculate the actual surcharge or refund due. Any violation, the order stated, “will be taken seriously.”
The “true-up” exercise, intended to reconcile accounts, ended up revealing deeper truths about the state of power procurement in Andhra Pradesh. The ₹923 crore refund is not a gift, but a correction—a mandatory return of funds that consumers should never have been on the hook for in the first place.
Breaking Down the Numbers
Over-collection and Refund rate as per the APERC Order:
