Statehood would have spelt a disaster for Telangana had it not been insulated from its low electricity generation capacity.
The existing power purchase agreements among Andhra Pradesh's four distribution companies with government-owned and private power projects were kept intact to keep power flowing to Telangana. The Southern Region Load Despatch Centre in Bangalore will monitor the supply. Andhra Pradesh's central and northern distribution companies will cater to the needs of the 10 districts of Telangana while the eastern and southern distribution companies will handle power distribution to the 13 districts of the residual Andhra Pradesh.
Separate transmission and generation companies incorporated for Telangana will also remain with residual Andhra. Though 61 per cent of the undivided state's 13,100 Mw capacity is located in the residual Andhra, Telangana was assured 51.18 per cent of the total availability in the Andhra Pradesh Reorganisation Act, 2014.
The undivided state's total availability of power is about 16,717 Mw, taking into account the 3,501 Mw produced by central generating stations, and the highest demand of 13,162 Mw was recorded on March 23, 2014. Another 3,000 Mw of thermal power capacity is being added to the grid feeding the two states and depending on the increase in production of natural gas in the Krishna Godavari basin, close to 2,000 Mw of idle capacity could be activated. Power will be one of the biggest strengths of the residual Andhra, which will run a surplus once private producers complete ambitious capacity addition. Telangana, on the other hand, will directly feel the loss of generation in residual Andhra.
The new state has to manage adequate supply to industry if it has to sustain growth because it now faces direct competition from residual Andhra. At the same time, it must ensure power supply to agriculture, given free. The new state has more farm electricity users than residual Andhra.
Power is Telangana's priority public investment as it implements the Pranahita-Chevella Lift Irrigation Scheme, which alone requires 7,000 Mw.