Tangedco losses mount to Rs 9,256 cr for 2018-19

With the company failing to revise tariff, the gap is widening between the cost of power purchase and sale of power to the consumer leading to huge losses over the years. Tangedco’s losses which were a little more than Rs12,750 crore in 2014-15, was brought down to around Rs 5,750 crore in 2015-16, after the Tamil Nadu Electricity Regulatory Commission revised the tariff upwards in December 2014 on its own. This was further reduced to around Rs 4,350 crore in 2016-17.

When the TN government signed the agreement with the Centre to implement UDAY scheme in January 2017, Tangedco was hoping to achieve break-even in 2017-18 but it ended up making a huge loss of Rs 7,760 crore which is 78 per cent more than the previous year. A senior Tangedco official attributed the mounting losses to the failure to periodically revise the tariff. “The tariff was last hiked in December 2014. Now the gap between cost of power purchased and the amount realised by the utility has crossed Rs two per unit,” the official said, adding that the tariff remaining unrevised despite the Uday scheme mandates periodic revision, including bi-annual.

Moreover, the AIADMK government’s implementation of its poll promise of making first 100 units free for the domestic consumers has caused a loss of Rs 2,500 crore to the utility. “Before the government made the first 100 units free, the cost of a unit of power was Rs 3.50 for the 100 units but now the government is paying a subsidy of Rs 2.50 per unit only,” a Tangedco source said. Besides, the high tension – industrial consumers – were moving towards renewable power and there has been a stagnation in growth of sale of power, the official noted.

A way forward for the revival of Tangedco was only through bifurcation of the distribution and the generation into different companies, the official said, adding that the distribution could be bifurcated or trifurcated to make it more competitive and provide better service to the consumers.