Chandrababu Naidu's power play: Inside Andhra Pradesh govt's 'Power Sector Reforms 3.0'

Andhra CM Chandrababu Naidu

Andhra Pradesh's power sector has been a top priority of the TDP-led government in the state amid rising debt and other core challenges. Chief Minister N Chandrababu Naidu, leading the Telugu Desam Party (TDP) coalition, has started a program called “Power Sector Reforms 3.0" to improve the state's struggling power utilities by restoring financial discipline, increasing operational efficiency, and boosting investor confidence.

The main goal of this effort is to improve leadership within the power sector. The state has appointed experienced professionals from the State Bank of India, NTPC, and Indian Railways to important positions in its generation, transmission, and distribution companies. After a fair selection process with over 140 candidates, the government has made 16 key appointments. This shows the government's commitment to a skilled and fair sector management approach.

This decision comes after the state government released a report indicating that the total debt of Andhra Pradesh’s power utilities increased from Rs 62,826 crore in FY2018-19 to Rs 1,12,422 crore in FY2023- 24. This 79% rise highlights serious financial and operational problems during the previous government's tenure.

Among the new leaders is Abid Rahman, who will manage finance at APSPDCL, the largest distribution company in the state. He has a lot of experience from senior roles at SBI. S. Venkateswarlu, the Chief General Manager at SBI, is now the Director of Finance at the Central DISCOM. K. Seetha Rama Raju, from the Indian Railways Accounts Service, is now in charge of finance and commercial operations at APGENCO. K. Srinivas, a former Executive Director at NTPC and Vice President at Jindal Power has joined the Andhra Pradesh Power Development Corporation Limited (APPDCL) as Director.

Nara Lokesh, Chairman of the Group of Ministers on Job Creation, played a significant role in choosing these leaders. He pushed for a qualified talent pool, emphasising the importance of expertise and experience over political ties.

The state government describes these appointments as the start of a plan to turn Andhra Pradesh into an energy hub. In a recent white paper, Chief Minister Naidu mentioned his earlier reform efforts — Power Sector Reforms 1.0 (1995–2004) and Reforms 2.0 (2014–2019) — which helped make the state a model for energy self-sufficiency and reform-oriented governance. He highlighted that Reforms 3.0 aims to solve current issues and prepare the sector for the future.

These reforms aim to lessen the financial strain on DISCOMs by promoting green energy. Energy Minister Gottipati Ravi Kumar recently took part in a key meeting in Mumbai organised by the Union Power Ministry. The meeting included Union Minister of State for Power Shripad Yesso Naik, Maharashtra Chief Minister Devendra Fadnavis, and power ministers from various states. They discussed ways to improve the struggling DISCOMs and make debt recovery easier.

Ravi Kumar said, “DISCOMs are becoming financially stable. Andhra Pradesh will use central schemes like PM Suryagarh and PM Kusum to reduce financial pressure on DISCOMs.” He also proposed increasing the state's battery storage capacity from 1,000 MW to 2,000 MW and asked the Centre to boost grants under the Green Energy Corridor initiative. Additionally, he requested an increase in approved pump sets from Rs 1 lakh to Rs 4.5 lakh to meet urgent agricultural needs in the newly reorganised state.

Ravi Kumar pointed out the financial problems caused by the previous administration, led by YS Jagan Mohan Reddy. He stated that power companies (DISCOMs) took on an extra Rs 50,000 crore in debt, increasing their total debt from Rs 17,000 crore to Rs 67,000 crore in just five years. Payments owed to DISCOMs were delayed or not paid, adding to their financial struggles.

In contrast, he noted that the current government has quickly acted to improve finances by paying off Rs 11,352 crore in outstanding debts.

These actions — management reform, debt payments, and adopting green energy — are seen as more than just fixing past problems. They are viewed as essential changes. With strong leadership in place, the state is now focusing on smart meters, improving billing systems, reducing power theft, and integrating more renewable energy into the grid.

It is unclear whether efforts will be enough to address over Rs 1.12 lakh crore in old debts. However, Andhra Pradesh’s method—focused on professionalism, honesty, and investment in green energy—is closely observed by other states facing similar problems. As the power sector prepares for necessary changes, the government clearly states that reform is essential, not optional.