Tamil Nadu

High cost of power to industrial consumers risks leaving a hole in Tangedco’s finances

With many units looking for cheaper alternatives, the electricity provider’s revenue is expected to reduce by as much as ₹1,500 crore for 2016-17

The heavy industries in the State are opting for other captive sources of energy to power their factories rather than depending on ‘costly’ power from the Tamil Nadu Generation and Distribution Corporation (Tangedco). Industrial consumption through the electricity utility in the State has drastically reduced, though consumption as a whole has increased.

The data provided by Tangedco brings out two contrasting situations – the positive factor being that industrial consumption has not reduced despite demonetisation and the implementation of the Goods and Services Tax (GST), and the negative factor being a big reduction in the electricity department’s income from the sale of power.

The consumption data released to The Hindu by Tangedco shows that total industrial consumption grew by 1,717 million units (MU) in the 2016-17 financial year (unaudited provisional figure) as against 2015-16. While the total industrial consumption for 2016-17 was 31,040 MU, the consumption for 2015-16 was 29,323 MU.

A senior Tangedco official said that the high tension supply registered under Tariff IA, comprising registered factories, textiles, tea estates, software industries and others, showed a decline of 2,726 MU, as the Tariff IA customers consumed 8,846 MU for 2016-17 as against 11,572 MU the previous year.

As per the theme paper presented at the energy conference organised by the Madras Chamber of Commerce and Industry (MCCI) recently, the average billing rate for industrial consumers in the State is the highest in the country, at ₹11.62 per unit.

The high cost of industrial power has led to industrial units seeking cheaper energy, and this is bound to have an impact on the finances of Tangedco, with its revenue expected to reduce by as much as ₹1,500 crore for 2016-17.

A senior Tangedco official said that the total revenue from the sale of power for 2015-16 (audited) was ₹33,381 crore, while the revenue for 2016-17 is projected to be ₹31,815 crore, leaving a revenue gap of ₹1,566 crore. The total loss in 2016-17 has been worked out to be ₹3,783 crore, he added.

A letter from the Editor

Dear reader,

We have been keeping you up-to-date with information on the developments in India and the world that have a bearing on our health and wellbeing, our lives and livelihoods, during these difficult times. To enable wide dissemination of news that is in public interest, we have increased the number of articles that can be read free, and extended free trial periods. However, we have a request for those who can afford to subscribe: please do. As we fight disinformation and misinformation, and keep apace with the happenings, we need to commit greater resources to news gathering operations. We promise to deliver quality journalism that stays away from vested interest and political propaganda.

Support Quality Journalism
Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Jun 6, 2020 5:20:35 AM | https://www.thehindu.com/news/national/tamil-nadu/high-cost-of-power-to-industrial-consumers-risks-leaving-a-hole-in-tangedcos-finances/article19900292.ece

Next Story