Andhra Pradesh govt reboots power sector with management overhaul

State has appointed 16 new directors in one go to revamp finances, operations of five state power utilities

The Andhra Pradesh government has replaced the directors of all five of the state’s debt-ridden power utilities in a move to improve the electricity sector’s finances. 

The new appointees comprise 16 officials, including some former employees, of state-run banks, major power firms such as NTPC, the private sector, the Indian Railways Accounts Department, and senior executives promoted from within the state’s power utilities.

  The state’s power utilities posted a cumulative debt of ₹1.12 trillion in FY24, up 79 per cent, or ₹49,596 crore, from ₹62,826 crore in FY19. 

According to a top government source, Chief Minister Nara Chandrababu Naidu approved the appointments on Saturday, with a formal order expected on Monday. Upon taking charge last year, the Naidu-led coalition government had promised to revamp the electricity sector, reduce losses, and lower power tariffs. 

  The government conducted the recruitment through a series of steps to ensure a balance of competence, experience, and understanding of key issues, and interviewed as many as 140 candidates. “Nara Lokesh, chairman of the group of ministers on job creation, closely monitored the hiring process and pushed for the appointment of the best talent to revamp the power sector,” said a source.

  The government didn’t respond to queries by Business Standard until the time of going to press.

  The companies include Andhra Pradesh Power Generation Corporation (APGENCO), Transmission Corporation of Andhra Pradesh (APTRANSCO), and the three distribution companies (discoms) — Andhra Pradesh Southern Power Distribution Company (APSPDCL), Andhra Pradesh Northern Power Distribution Company (APNPDCL), and Andhra Pradesh Central Power Distribution Company (APCPDCL).

  Top hires from State Bank of India include Abid Rahman (director, finance in APSPDCL) and S Venkateswarlu (director, finance in APCPDCL). While Rahman held leadership roles at the state-run bank, Venkateswarlu was its chief general manager prior to this appointment.

  K Seetha Rama Raju, appointed as director (finance and commercial) at APGENCO, is from the Indian Railway Accounts Service and previously served as deputy chief administrative officer of the Indian Railways. Similarly, K Srinivas, appointed as director of the AP Power Development Corporation (APPDCL), was executive director at NTPC and most recently vice president at Jindal Power. “We wanted to ensure continuity in operations too. Hence, some directors were promoted from state power utilities too," the source added. 

According to a white paper published by the state government, the finances of the power sector deteriorated over the past five years. Capital expenditure loans increased to ₹46,380 crore from ₹36,792 crore, while operational expenditure loans surged to ₹66,042 crore from ₹26,034 crore. During the same period, government subsidy dues increased by 65 per cent to ₹12,681 crore, and departmental arrears jumped 188 per cent to ₹15,157 crore.  As of April 4 this year, the outstanding dues of state discoms to power generators stood at ₹5,989 crore. 

The state is also betting big on renewable energy, green hydrogen, and improving transmission efficiency to revamp the power sector. According to a Central Electricity Authority road map, of the target of 500 gigawatt (Gw) generation capacity from non-fossil fuel resources by 2030, 86 Gw of RE potential is in South India. Of this 86 Gw, around 51 Gw has been identified in Andhra Pradesh (Anantapur – 20 Gw, Kurnool – 23 Gw, and Kadapa – 8 Gw).