Hyderabad power bills surge under new KVAh system
HYDERABAD: Industries in Hyderabad’s outskirts are facing steep electricity bills after a new billing mechanism came into force. A unit that paid ₹39,000 last month received a ₹3.50 lakh bill under the revised system, while another industry that usually pays ₹5 lakh was billed ₹25 lakh.
Industrial, business and commercial establishments say the new billing method, introduced by the Telangana Electricity Regulatory Commission, has sharply increased costs. They report bills rising three to five times, triggering concerns over the impact on industries, investments and employment in the state.
Critics allege that power distribution companies are focused on collecting thousands of crores in additional revenue. Industry bodies have urged authorities to allow time for adjustment and implement the system in phases after consultations.
New KVAh billing aimed at stabilising power factor
For the 2025–26 financial year, the regulator directed Telangana power distribution companies to implement KVAh (kilovolt-ampere hour) billing for industrial, business and commercial consumers. The move targets high-tension category users and seeks to keep the power factor stable, close to one unit.
Discoms asked industries to install Auto Power Factor Control Panels (APFCP) by March to regulate power factor. Although the new billing system was introduced in December, electricity bills under it have been issued since the first week of January. Industry representatives say the change could impose an additional burden of about ₹500 crore per month on small and micro enterprises across the state.
How the system changed and why bills rose
Earlier, bills were based on kilowatt-hour (kWh), charging only for actual energy consumed. Reactive energy, measured as kilovolt-ampere reactive hour (kVARh), was not billed. Reactive energy is drawn indirectly by equipment such as motors even when they are not fully operational, and excess levels can destabilise the grid.
Under the new system, APFCP panels account for reactive energy as units, increasing total consumption and, in turn, bills. Discoms argue that keeping the power factor within limits will stabilise the grid and address voltage fluctuation issues.
Time-of-day tariff changes add to burden
Alongside KVAh billing, discoms revised the Time of Day (ToD) tariff. Industries pay an extra ₹1 per unit during peak hours (6 am to 10 pm). Earlier, off-peak consumption (10 pm to 6 am) attracted a rebate of ₹1.50 per unit, which has now been withdrawn. Industry bodies say these changes have further raised costs.
Industry seeks deadline extension, policy review
Industrial owners have asked discoms to allow billing under the old method until APFCP installations are completed. In Warangal and Peddapalli districts, the Northern Power Distribution Company of Telangana granted rice millers a two-month deadline to install the mechanism.
Demand for APFCP equipment and consultancy has surged, leading to supply delays. Several associations, including the Federation of Telangana Chambers of Commerce and Industry, Telangana Industrialists Federation, Telangana Iron and Steel Manufacturers Association, Telangana State Tool Manufacturers Association and Cherlapalli Industries Association, which together represent over 50,000 units, have met to seek a review. They plan to meet the deputy chief minister and industries minister to press for reconsideration of both KVAh billing and peak-hour tariffs.
