Shift peak loads to solar hours, regulatory body tells TNPDCL

CHENNAI: To rein in spiralling power procurement costs and optimise resource utilisation, the Tamil Nadu Electricity Regulatory Commission (TNERC) has directed the TN Power Distribution Corporation Ltd (TNPDCL) to shift peak electricity loads from non-solar hours to solar hours and accelerate the development of its own generation capacity.

The commission, in a recent order to approve the True-Up petition of the TNPDCL for the financial year 2023-24, highlighted that only about 30% of TNPDCL’s requirement is met through its own generation, while the remaining 70% is sourced from external agencies, private generators and power markets.

Notably, power purchase accounts for nearly 60% per cent of the annual revenue requirement (ARR) of TNPDCL. In FY 2023-24, TNPDCL’s total procurement cost stood at ₹48,130 crore — a sharp rise from ₹43,952 crore in the previous fiscal. Average cost of purchased power increased to ₹6.52/unit, up from ₹5.94.

The commission noted that excessive dependence on power purchases, particularly during non-solar hours, has strained the utility’s finances and contributed to tariff pressure. To address this, TNERC has reiterated its directive for flattening the load curve by shifting demand — especially during early morning and evening peaks — into solar hours (9 am to 5 pm), when solar generation is abundant and cheaper. Thermal and short-term market-based purchases during non-solar hours, where tariffs can exceed ₹8-₹10/unit, are to be curtailed.

The commission has instructed TNPDCL to undertake a detailed load pattern analysis in coordination with the State Load Despatch Centre and take measures to align scheduling with solar availability. It has also advised the utility to monetise surplus generation through market sales, following the merit order principle, thereby offsetting purchase costs.

To reduce future reliance on external sources, TNPDCL has been urged to prioritise capacity addition through renewable energy, hydro, pumped storage, and battery energy storage systems. The acceleration of ongoing thermal and hydro projects was also recommended.

The commission’s approval came amid the presence of 112 adverse audit remarks in the company’s consolidated financial statements, prompting criticism from activists and consumer groups.

“TNPDCL’s True-Up petition for FY 2023-24 has been approved by the Commission on April 30 by ignoring 112 adverse remarks raised by auditors. They say this is the real account. But if the adverse remarks have to be explained in next year’s True-Up petition, how can this be the True-Up account now approved for FY 2023-24?” Neelakanta Pillai questioned. “Also, if approval was needed by April 30 just so that explanations could be pushed to next year, then what was the delay all this while? Why wait a whole year if it was urgent? They’ve made the honourable institution of the commission a scapegoat.”

While TNERC acknowledged the audit qualifications, it justified partial reliance on the Ind AS-based accounts for truing up, stating that the adverse remarks do not invalidate the entire accounting basis and that adjustments could be addressed in future filings.