As a part of its corporate diversification plan, DCL ventured into power generation soon after this sector was opened up for private investments. The Company took up implementation of a Hydro Power Project of 3.75 MW installed capacity on the Guntur Branch Canal (GBC) of the Nagarjuna Sagar Right Main Irrigation Canal (NSRMC), at a location near Narsaraopeta, Guntur District. This project was taken up for implementation in 1995 and commissioned in April 1996.

The Hydro - electric Power Unit comprises of a Power House consisting of 3 Nos of 1.25 MW Horizontal Full Kaplan Turbines, coupled to Squirrel Cage Induction Generators with guaranteed out put of 1375 KW each. The Power House is equipped with a Dewatering System, Oil Pumping Units, Cooling Water Facility, Computerized Control Room (CCR), standby DG set, Emergency DC Battery Back-up etc.

The Switchyard comprises of 3 Nos of 1.6 MVA Transformers and 200 KVA auxiliary generators. Power is evacuated at 33 KV on the APTRANSCO's Double Circuit Inter-connection Point in the Switchyard. The Switchyard is equipped with Capacitor Banks with protection equipment and metering facilities.

The plant is designed for an annual generation of 21 million electrical power units per annum.

Till 2014 (upto reorganization of United Andhra Pradesh), the entire power generated was wheeled for captive use in the cement plant of the company. Thereafter, the company was selling the entire power generated to third party industrial customers.

Now, the company is selling the entire power generated from the Hydel Power Plant through Indian Energy Exchange Ltd (IEX).