Hyderabad: The four-month deadline set by the Telangana Electricity Regulatory Commission (ERC) for Rythu DISCOM to begin operations expired on November 10. The new power distribution company has not yet started work. Many of the conditions attached to its licence remain pending, and employee allocations, new appointments and grid connection are incomplete.
The ERC granted Rythu DISCOM a fully conditional distribution licence on July 10, 2026. It told the company to begin operations within four months of the order and to meet all preconditions and instructions first. The commission also ruled that Rythu DISCOM must not start operations until it fulfils the conditions, and it ordered the company to report to the commission.
The government issued GO-4 on March 11, 2025, to establish Telangana Rythu Power Distribution Company Limited (TGRPDCL) as the state’s third power distribution company. The cabinet approved the move, and the Union Corporate Affairs Ministry then gave its permission. The government has allotted the company an office in Mint Compound. According to the Namaste Telangana report, crores of rupees were spent over the year on permissions and arrangements.
The government has also transferred the DISCOM’s CMD, Musharraf Farooqui, to the Health and Family Welfare Department. The company now has an in-charge CMD. Doubts are rising over whether the Rythu DISCOM experiment has failed, and the report said the company’s establishment so far remains limited to announcements and papers.
The report said the DISCOM slowed down after the ERC issued the conditional licence. As the deadline approached, the government divided the assets and liabilities on October 12 and allocated the power purchase agreements. The report said the company has largely failed to meet the other conditions.
With the deadline over, Rythu DISCOM must approach the ERC again and file a supplementary petition. The company has taken no initiative in that direction so far.
The government says it is setting up Rythu DISCOM to provide quality electricity to farmers. Along with agricultural connections, the company will handle lift irrigation, Mission Bhagiratha, Hyderabad Jalmandali and other drinking water connections. The state has allocated 30.62 lakh connections to the new DISCOM. About two thousand staff are required, but the arrangements to run an organisation with such wide responsibilities are not yet in place.
ERC conditions still awaiting action
Under Section 131 (4) and (5) of the Electricity Act-2003, the government must officially announce the transfer scheme. The scheme must state the assets, liabilities, consumer connections, and the rights and responsibilities of employees. The report said the scheme exists only on division papers, and the connections and consumers still sit with the old DISCOM.
Clause 38.1 of the Distribution License Regulations-2016 requires Rythu DISCOM to submit a comprehensive business plan to the commission for approval within three months of the order. The plan must cover annual load, growth projections, reduction of distribution losses, an interface metering plan, PPA allocation, a capital adequacy plan and employee adjustment. Rythu DISCOM has not submitted the plan to the ERC. Another condition requires an application under Schedule-2 as per the DISCOM Distribution License Rules.
Rythu DISCOM must sign Inter-DISCOM Transmission Agreements and Service Level Agreements with the old North and South DISCOMs within 60 days. The agreements must cover O&M, new connections, infrastructure sharing, employee deputation, energy accounting and grievance redressal. The report said there is no progress on this. The DISCOMs must also sign bulk supply agreements for interim power supply until the final allocation of power purchase agreements, and the report said there is no evidence that this has happened.
Before the final Power Purchase Agreements and allocation orders, the three DISCOMs must run a mock allocation for at least three months. They must resolve the issues and submit a report to the ERC, but the mock run has not taken place. Transco must also sign grid connectivity agreements with the other DISCOMs. Rythu DISCOM must complete registration with the Telangana Load Dispatch Center (SLDC) and obtain MTT codes, and it has not yet obtained the codes.
The commission has ruled that employees’ terms of service, seniority, pension obligations, reservation roster and promotions must not suffer any disruption. Uncertainty over this continues. After operations begin, the DISCOMs must set up two consumer grievance redressal platforms, one in the North DISCOM and one in the South DISCOM. Until then, only the platforms of the old DISCOMs will resolve grievances, and no new platform has been set up so far.
Under the CEA Meter Installation and Operation Rules, the DISCOMs must install meters of appropriate accuracy in phases at the interface points between the Rythu DISCOM network and the old DISCOM network. The meters have not been installed. Until the official launch of Rythu DISCOM, new connections in other categories, including agricultural connections, must not stop under any circumstances. The old DISCOMs will continue to grant new connections as usual, and the issuance of connections in the name of Rythu DISCOM has not yet started.