3 days ago
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Presenting a grim representation of the fiscal wellness of the Tamil Nadu Power Distribution Corporation Limited (TNPDCL), the White Paper connected finances of the State authorities has stated the powerfulness inferior faces a “persistent monthly structural currency shortfall,” which is autarkic of the Average Cost of Supply(ACS)-Average Revenue Realised (ARR) position.
A monthly shortfall of ₹2,500 crore translates to an yearly liquidity spread of astir ₹30,000 crore, financed done a operation of short-term borrowings, delayed payments to powerfulness acquisition counterparties, and deferred superior expenditure. The shortfall arises successful presumption of the monthly outgo obligations for powerfulness purchase, indebtedness work and operations. The concern is contempt the TNPDCL receiving tariff subsidy and loss-funding assistance transfers. , according to the document.
TNPDCL is 1 of the entities formed aft the abolition of the Tamil Nadu Generation and Distribution Company (TANGEDCO) successful 2024. The different firms are the Tamil Nadu Power Generation Corporation Limited (TNPGCL) and the Tamil Nadu Green Energy Corporation Limited (TNGECL). The 3 companies, on with Tamil Nadu Transmission Corporation (TANTRANSCO), form, what is popularly called, the TNEB (Tamil Nadu Electricity Board) group.
Describing the ACS-ARR spread arsenic the “fundamental operating driver” of the TANGEDCO’s losses, the White Paper, released connected Tuesday, recalled for 7 consecutive years up to 2021-22, powerfulness tariff was not revised with the spread rising to ₹1.58 per unit. The instauration of Multi-Year Tariff (MYT) successful 2022-23, linked annually to the Consumer Price Index, provided “partial correction.”
The spread had since narrowed down “sharply,” reaching ₹-0.05 per portion successful 2024-25 and turning marginally affirmative (₹0.04/unit) connected a provisional ground successful 2025-26. However, this was “not owing to the operational ratio oregon afloat betterment of the outgo of proviso from consumers. On the contrary, contempt tariff hikes, determination has been small structural betterment successful the finances,” the papers stated, attributing the declining spread to the “huge” fiscal enactment of the State authorities to money the gross nonaccomplishment of the TNPDCL. To springiness an illustration, the yearly enactment fixed by the authorities to the TNEB radical was ₹20,996 crore during 2021-22 and this went up to ₹ 33, 478 crore successful 2025-26, a “59.45% summation successful 5 years.” A full of ₹1,45,185 crore was provided to the radical successful the past 5 years.
The White Paper cautioned energy consumers the concern “is going to beryllium further compounded” connected relationship of the Supreme Court’s bid connected regulatory assets with a “fresh large-scale fiscal obligation.” While an entreaty had been filed, the judicial verdict’s accusation for Tamil Nadu was that the consumers oregon the State government, done subsidies, should sorb the regulatory assets of ₹59,000 crore, which had been incurred by the powerfulness utilities but not recovered on with the carrying outgo either done tariff oregon by grant. The Court ordered regulatory assets should beryllium recovered afloat by March 2031. In different words, this would mean an “additional structured obligation” of ₹ 11,800 crore per twelvemonth from 2026-27.
Hinting astatine the request for a broad solution model “covering tariff path, subsidy rationalisation, indebtedness restructuring, and operational reform,” the White Paper visualised that otherwise, the TNEB radical “will proceed to sorb a rising stock of the State’s fiscal resources, crowding retired productive expenditure and deepening the structural imbalance.”
