TNPDCL to cancel power purchase tender after bidders quote up to Rs 41.5 per unit

CHENNAI: Seeking to quell another storm over expensive power purchase, Electricity Minister R Nirmalkumar said Tamil Nadu Power Distribution Corporation Ltd (TNPDCL) will cancel its short-term power purchase tender after vendors quoted rates of up to Rs 41.50 per unit.

“We are not going to purchase power at the quoted rates of Rs 37 to Rs 41 per unit. Several vendors quoted very high prices when we opened the tender today. Since we have sufficient power to manage for the next three months and are procuring power in advance for next summer, these prices are unreasonable,” he said.

The tender, floated on October 17, sought to procure 1,000 MW of power every month from November 2026 to May 2027 to meet demand during evening peak hours between 6 pm and midnight. The booking data showed accepted rates of Rs 37.50 per unit for November and up to Rs 41.50 per unit for December 2026 to May 2027. Nirmalkumar said he had instructed officials to cancel the tender and ruled out further gas-based power purchases at high rates.

The State would instead float medium- and long-term power procurement tenders to meet its requirements over the next 20 years, he said.

The proposed procurement at rates of up to Rs 41.50 per unit comes a fortnight after TNPDCL agreed to procure power at rates of up to Rs 37 per unit to meet an anticipated peak-hour shortage in October. The utility had invited bids for 1,500 MW between midnight and 2 am and 3,000 MW between 6 pm and midnight from October 12 to 31. However, Nirmalkumar said that power purchase would be limited as the power demand has come down following the onset of the North East Monsoon on October 15.

TNPDCL had floated the October tender on October 6 amid a sharp increase in electricity demand. A senior official said the State had been witnessing an unprecedented rise in consumption, driven by the impact of El Niño.

Meanwhile, the utility has floated other tenders to secure power for the coming months and the next summer. On October 8, it invited bids for round-the-clock (RTC) and peak-hour power from February to July, with the proposed procurement ranging from 750 MW to 2,000 MW. Another tender covered RTC, peak-hour and night-time power from November to January, with quantities ranging from 200 MW to 1,200 MW.

Nirmalkumar said the State would focus on medium- and long-term procurement rather than buy power at the high rates quoted in the latest tender.