APERC Approves Cost Data for Power Distribution Materials in Andhra Pradesh for FY 2025-26

Posted On - 11 March, 2025 • By - King Stubb & Kasiva

Introduction

The Andhra Pradesh Electricity Regulatory Commission (APERC) approved the cost details of materials used in power distribution works for financial year 2025-26.[1] The decision is important in ensuring transparency, standardization, and cost effectiveness in the acquisition of materials necessary for electricity distribution infrastructure. The approval is compliant with the regulatory requirements and focuses on simplifying the supply of electricity throughout the state.

Explanation (Key Points)

Regulatory Framework and Submission Process

  1. Annual Submission Requirement: According to Clause 9 of Regulation 4 of 2013, distribution and transmission licensees must submit a schedule of rates to the Commission annually. This cost data is published in a cost data book by April 1 each year, forming the basis for estimating the cost of erecting electric lines and plants.
  2. Compliance with Load Forecast and Resource Plan: As per paragraph 117 of the order dated June 27, 2024, the distribution licensees must submit the cost data by December 31 of each year for approval by APERC.
  3. Concerns from Stakeholders: Public hearings in January 2025 highlighted discrepancies in cost data rates among DISCOMs, with stakeholders raising concerns about abnormally high procurement rates.
  4. APCPDCL’s Submission and Approval Process: The Central Power Distribution Company of Andhra Pradesh (APCPDCL) submitted the draft cost data for FY 2025-26, which was scrutinized by APERC. The proposals were compared with neighboring states’ DISCOM rates, manufacturer prices, and local market trends, incorporating escalation factors for CPI & WPI adjustments.

Key Directives and Provisions in the Approval

  1. GST Exclusion: All approved rates exclude GST, ensuring clarity in cost assessments.
  2. Pilot Projects for Energy Efficiency: Each DISCOM will install an 11 kV feeder with 5-star or 2-star distribution transformers (DTRs) on a pilot basis to evaluate cost-benefit outcomes and energy savings.
  3. Breaker Cost Optimization: Due to the high cost of PMA breakers, conventional breakers for 33 kV and 11 kV lines may be considered for future projects, with periodic performance reviews of PMA breakers.
  4. Erection Guidelines for 33 kV Lines: The erection process must comply with the standards set in the review meeting held on February 23, 2024, with the necessary approvals for tower installations based on site inspections.
  5. Publication Requirement: DISCOMs must publish the approved cost data on their websites by April 1, 2025, to serve as the reference for cost estimations in distribution projects.
  6. Strict Compliance Measures: Any deviations from the approved cost data will be strictly monitored, with potential consequences for non-compliance.

Approved Cost Data Highlights

APERC approved detailed cost data covering various categories of materials required for power distribution, including:

  • Supports and Fixtures: RS Joists, PSCC Poles, MS Channels, Steel Wires, and Cement.
  • Insulators and Hardware: 33 kV, 11 kV, and LT insulators, cross arms, clamps, and stay sets.
  • Conductors and Cables: AAA and ACSR conductors, XLPE power cables, LT aerial bunched cables, and cable jointing kits.
  • Transformers and Switchgear: Power transformers, distribution transformers, circuit breakers, relays, and metering equipment.
  • Earthing and Miscellaneous Materials: Earthing rods, clamps, distribution panels, and batteries.

Conclusion

APERC’s clearance of Andhra Pradesh’s power distribution materials cost data for the FY 2025-26 is a milestone towards making procurement uniform and cost-effective in terms of developing power infrastructure. Through treating stakeholder concerns, imposing compliance with regulatory orders, and ascertaining reasonable prices through comparison, APERC hopes to make electricity distribution more reliable and affordable in the state. These regulations promulgated in this approval are likely to enhance transparency, efficiency, and accountability in procurement, ultimately reaching consumers and the power industry in general.

[1] https://www.aperc.gov.in/admin/upload/CostdataforFY2025-26.pdf