TANGEDCO in financial distress as govt refuses to revise tariffs

TANGEDCO's financials are stressed because the previous government and Tamil Nadu Electricity Regulatory Commission (TNERC) did not allow them to revise their tariffs in the last seven years

TANGEDCO's total debt is a staggering ₹1.07 lakh crore, and the discom is struggling to make ends meet

TANGEDCO has lowered its loss for the financial year ending March 2020 by ₹659 crore compared to the previous year. While the financial year ending March 2019 saw the total loss to be ₹12,623 crore, a year later the loss came down to ₹11,964 crore.

The loss has come down basically due to better revenue collection which has increased by 2.45 per cent in the year ending March 31, 2020, as compared to previous year. But the discom has a total debt of ₹1.07 lakh crore for which interest is being paid and according to sources the majority of the debt is towards power projects which are coming up in the state.

TANGEDCO had a record loss in 2013-14 when the total loss recorded was ₹13,000 crore and since then it declined till 2018-19 and then it subsequently started to increase yet again and reached ₹12,000 crore in 2018-19.


Also read: Tamil Nadu’s power consumption dips, leading to huge revenue loss

TANGEDCO’s financials are stressed due to the previous government and Tamil Nadu Electricity Regulatory Commission (TNERC) not revising the tariff in the last seven years, while all other government-owned discoms in other states have revised the tariff at least once in the last seven years.

While the main revenue through tariff remains more or less the same, the expenditure has increased several times. The price of coal has increased several times and beyond this, a cess was levied to control pollution.

Power purchases have shot up by ₹2,967 crore compared to the previous year but at the same time the cost of power generation has declined by ₹1,265 crore. This shows that TANGEDCO provided round-the-clock supply by purchasing more power than generating from its own thermal units.

TANGEDCO’s total debt is a staggering ₹1.07 lakh crore, which was Tamil Nadu government’s debt a decade ago. The discom is struggling to make ends meet with several crores pending to thermal and renewable power generators.

Also read: ₹90,000 crore liquidity infusion to help Discoms, says Sitharaman

With the state government refusing to give its nod to the discom to present its tariff revised report, the company is looking into itself to save as much as ₹ 1,000 crore to lower the tariff increase.

The discom has started to sell fly ash from its thermal unit premises thereby earning not less than ₹500 crore. The fly ash is being sold to all cement companies for a cost except to Tamil Nadu government owned cement companies for which it is given free of cost.

It has asked all thermal units to purchase repaired parts at the same cost thereby saving not less than ₹100 crore each year. Despite all these efforts, unless the tariff is increased, the discom is likely to face more financial problems. Due to this, the other income has scaled up by ₹2,160 crore.


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