Tamil Nadu Generation and Distribution Corporation’s purchase rejected

To meet the power deficit, Tangedco has purchased 2,477 million units from four IPPs at an average cost of Rs 11.20 per kwhr totalling Rs 2,774 crore from April 2013 to February 2014. The average rate of realisation of the utility by sale of power is Rs 4.89 per kwhr. Tangedco had filed a petition seeking TNERC’s approval for power purchased at high cost beyond the approved quantum.

According to the TNERC’s order, Tangedco had resorted to high cost power purchase in the wake of power shortage faced in the state. As against the power demand of 83,522.30 MUs, the energy available in the state was only 76,039.233 MUs. It resulted in a power deficit of 7,483.067 MUs. Tangedco explained in the petition after exhausting all available cheaper sources that the power was purchased from the high cost IPPs according to the grid conditions.

“It is purely to reduce the load shedding to some extent so that the problems faced by the consumers will be reduced to some extent,” the utility said in its petition. To a pointed query on recovering the high cost of power, the commission noted that Tangedco has merely stated that it would be included in the ARR during the next tariff revision. “The response of the Tangedco is not justified,” it said.

“Thus, the excess cost of power purchased is not approved for the purpose of ARR,” the order said, allowing the Tangedco to recover the revenue to the extent of ARR for power purchase.