TNERC picks holes in Tangedco’s purchase from unapproved sources

CHENNAI: The Tamil Nadu Electricity Regulatory Commission (TNERC) has expressed displeasure over Tangedco’s power procurement from unapproved sources without prior permission.

Tangedco filed a petition in the commission seeking ratification and approval for procuring 200 MW round-the-clock (RTC) power in October 2022 at Rs 8.75 per unit and 640 MW RTC power from February 15 to May 20 this year at Rs 8.50 per unit to meet summer demand.

In its order, the commission said that the utility ought to have filed a miscellaneous petition before the tender initiation for power procurement, as directed in the last year’s tariff order. However, Tangedco filed the petition for ratification and approval only after the tender was finalised, and an agreement was executed, it said and warned that it should be avoided in the future strictly.

“As a special case, considering the exigency and preparedness to meet the anticipated power during October 2022 and summer 2023, the Commission is inclined to approve and ratify Tangedco’s procurement,” it said.

Tangedco had initially planned to procure 1,000 MW RTC power from September to October 2022 and 2,000 MW from February to May 2023 to meet the anticipated demand. It argued that the power demand was steadily increasing by around 5% every year and particularly, the minimum demand and consumption of power had increased during summer months. However, the quantum of energy procurement was revised after processing of 400 MW peak-hour requirement through the day-ahead market exchanges.

Tangedco justified the energy procurement at Rs 8.75 per unit in October and Rs 8.50 per unit during summer citing the increasing trend of coal import prices and average tariff finalised by other discoms.

“While analysing the international imported coal rate, including shipping and transporting charges, from July to December 2022, the coal price has been increasing steadily due to a spike in the American dollar rate. The details of coal prices range from 100.63 to 106.545 per ton and the dollar rate ranges from Rs 79.336 to Rs 82.728. The rates finalised under the tender at Rs 8.50 per unit was found to be reasonable,” it said.