TN discusses with lenders to reduce interest rate for TANGEDCO, to rationalise tariff categories

Tamil Nadu government is in discussions with the lenders to its power utility to reduce their interest rate, said the Minister for Electricity, Prohibition and Excise V. Senthilbalaji.

In the Energy Department’s Policy Note for 2022-23 presented in the Assembly, Senthilbalaji said the state power utility Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) is having accumulated losses to the tune of Rs 1,39,226 crore.

He said the DMK government has proposed to take measures such as installation of smart meters, restricting high-cost power purchase and others to increase the revenue and reduce the expenditure.

The Government has also initiated discussions with Financial Institutions such as Rural Electrification Corporation (REC), Power Finance Corporation (PFC), Tamil Nadu Power Finance Corporation (TNPFC), among others, and Commercial Banks to reduce the rate of interest to nine per cent, Senthilbalaji said.

He said TANGEDCO in 2021-22 achieved a savings of Rs 2,200 crore by measures like improved generation by optimum operation of the existing generating stations, savings due to interest reduction, fly ash sale, power swapping arrangements, and reduction in distribution losses.

In order to meet the revised environmental norms, it is planned to install Flue Gas De-sulphurisation (FGD) in all five TANGEDCO owned thermal stations at the estimated cost of Rs 2,350 crore, he said.

Senthilbalaji also said rationalisation of tariff categories prevailing at present need to be initiated as a reform process, so as to improve revenue efficiency in TANGEDCO.

During 2021-22 the Average Rate of Realisation (ARR) per unit was Rs 6.96 while the Average Cost of Supply (ACS) per unit was Rs 8.90.

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