TANGEDCO in financial difficulty as the government refuses to revise tariffs

TANGEDCO’s finances are under stress because the previous government and the Tamil Nadu Electricity Regulatory Commission (TNERC) did not allow them to revise their tariffs for the past seven years

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

TANGEDCO reduced its loss for the year ending March 2020 by ₹659 crore from a year earlier. While the financial year ending March 2019 saw the total loss amount to ₹12,623 crore, a year later the loss dropped to ₹11,964 crore.

The loss narrowed primarily due to better revenue collection which increased by 2.45% in the year ending March 31, 2020, compared to the prior 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 energy projects that arise in the state.

TANGEDCO recorded a record loss in 2013-14 when the total loss recorded was ₹13,000 crore and since then it decreased until 2018-19, then it started to rise again and reached ₹12,000 crore in 2018 -19.

Read also : Tamil Nadu’s energy consumption drops leading to huge revenue loss


TANGEDCO’s finances are under stress due to the fact that the previous government and the Tamil Nadu Electricity Regulatory Commission (TNERC) did not revise the tariff for the past seven years, while all other discoms owned to government in other states have revised the tariff at least once in the last seven years. .

While the main revenue from tariffs remains more or less the same, expenditure has increased several times. The price of coal increased several times and beyond that a tax was levied to control pollution.

Power purchases increased by ₹2,967 crore from the previous year, but at the same time, the cost of power generation decreased by ₹1,265 crore. This shows that TANGEDCO provided round-the-clock supply by purchasing more electricity than by generating it from its own thermal units.

TANGEDCO’s total debt is a staggering ₹1.07 lakh crore, which was the debt of the government of Tamil Nadu ten years ago. Discom is struggling to make ends meet with several crores on hold for thermal and renewable power generators.

Read also : ₹90,000 crore cash infusion to help Discoms, says Sitharaman

As the state government refuses to give discom approval to submit its revised tariff report, the company plans to save up to ₹1,000 crore to reduce the tariff increase.

The nightclub started selling fly ash from its thermal unit premises earning no less than ₹500 crore. Fly ash is sold to all cement companies at a cost, except to government-owned cement companies of Tamil Nadu for which it is given free of charge.

He required all thermal units to purchase repaired parts at the same cost, thus saving no less than ₹100 crore every year. Despite all these efforts, unless the tariff is increased, the discom is likely to encounter more financial problems. Due to this, other income increased by ₹2,160 crore.

Sarah J. Greer