In October 2008, it was decided to create TNEB Limited and TANTRANSCO and TANGEDCO

The 53-year-old Tamil Nadu Electricity Board (TNEB) will formally cease to exist from November 1 with the scheme of transfer of property and personnel from the TNEB to the holding company, TNEB Limited, and its subsidiaries, Tamil Nadu Transmission Corporation (TANTRANSCO) and Tamil Nadu Generation and Distribution Corporation (TANGEDCO), coming into effect.

A 35-page government order, spelling out the transfer scheme, was issued by the Energy Department a few days ago.

In the wake of stipulations of the Electricity Act, 2003, the government, in October 2008, decided to create the TNEB Limited and TANTRANSCO and the TANGEDCO. In June 2009, TANTRANSCO was registered. Six months later, the two subsidiaries were incorporated. Last December, Chief Minister M. Karunanidhi inaugurated the TANTRANSCO.

Senior officials say the holding company – TNEB Limited – will be a shell company and the Board's existing functions will be carried out by the two subsidiaries. The restructuring of the TNEB is likely to result in operational efficiency and financial performance.

At regular interval, the State government has been securing extension from the Centre for the continuance of TNEB as ‘State Transmission Utility and Licensee. The latest extension, obtained in September, is valid till December 15.

Of about 72,000 employees, around 10,000 will be transferred to TANTRANSCO and the rest to TANGEDCO.

According to the government order, a tripartite agreement would be signed by the State government, TANTRANSCO/TANGEDCO and representatives of unions to safeguard the interests of workers and pensioners. The officials say the text of the draft agreement has already been circulated to the unions for their views. On incorporating their feedback, the agreement will be signed in a few weeks.

The Chairman of the Board will head all the three entities. The TNEB Limited Chairman will, in consultation with TANGEDCO and TANTRANSCO, constitute grievance handling committees to receive representations of workers on issues concerning their transfer and absorption. It will also make recommendations on such issues. The State government will issue orders on the basis of recommendations.

Till further orders of the Tamil Nadu Electricity Regulatory Commission on tariff determination, the TANGEDCO will collect fully the revenue from distribution and retail supply of power and reimburse the expenses of the TANTRANSCO on actual basis.