AP pushes power sector reforms with target of Rs. 4 per unit cost

Metro India News | AMARAVATI

Andhra Pradesh Chief Minister N. Chandrababu Naidu has outlined an ambitious roadmap to overhaul the state’s power sector, focusing on reducing electricity procurement costs, clearing utility debts, and ensuring consumers are not burdened with higher tariffs. Chairing a review meeting of the energy department on Tuesday, the Chief Minister directed officials to bring down the power purchase cost to ₹4 per unit, calling it a critical step toward financial sustainability.

Officials informed that ongoing reforms could reduce procurement costs by ₹1.32 per unit, with projections to reach ₹4.10 per unit by 2028-29. However, the Chief Minister insisted on achieving the ₹4 target, urging departments to intensify cost-cutting measures and improve operational efficiency. He emphasized that reforms must not translate into increased tariffs and instead focus on internal efficiency and better financial planning.

Highlighting progress so far, officials stated that improved management of power utilities has already resulted in savings of Rs. 339 crore during 2025-26. Chandrababu Naidu instructed that such savings should be scaled up further through tighter monitoring, optimized procurement, and better contract management.

The Chief Minister also stressed the importance of transitioning towards green energy, noting that Andhra Pradesh is already a leader in solar power in South India. He called for greater adoption of rooftop solar under the PM Surya Ghar scheme and solar-powered agricultural pump sets through PM Kusum. He further directed integration of renewable sources such as wind energy, pumped storage projects, and battery storage systems to ensure long-term sustainability.

In a forward-looking move, Chandrababu Naidu proposed the establishment of an Energy University to drive innovation and research in the sector. 

He also called for the creation of a dedicated incubation fund to support startups working on energy technologies, with power utilities providing financial backing to innovative solutions.

Addressing concerns over rising debts of power companies, the Chief Minister instructed officials to design strategies to clear liabilities without imposing additional burden on consumers. He reiterated that Andhra Pradesh had been a pioneer in energy reforms, including early adoption of energy auditing, and must continue to lead in adopting modern technologies.