Tamil Nadu's power purchase from private sources has gone up by 238% in the last 10 years while the losses during the same period have increased by 882%. Though the demand increased by 80% during the said period, the authorities chose to meet the increasing demand through purchase of power from private producers, leading to losses as the tariff was not increased commensurately.
In 2003-04, the total amount spent on power purchase was 6,664 crore. In 2012-13, it increased to 22,492 crore. And the loss, which was 1,110 crore in 2003-04, increased to 10,907 crore in 2012-13 after touching a high of 13,321 crore in 2011-12.
Opposition parties have been making a hue and cry about the mounting losses incurred by Tamil Nadu Generation and Distribution Company (Tangedco) owing to increasing outflow on account of power purchase from private producers. But independent experts and Tangedco officials say that since adequate capacity addition was not planned during the past 10 years, the power utility's option is limited to purchasing electricity from private producers, if it has to avoid major power cuts.
Tamil Nadu's own installed power generation capacity has gone up by only 483MW between 2001 and 2010 whereas the demand, which was around 6,000MW in 2001, touched 10,000MW in 2010 and currently it is hovering around 14,000MW. Hence, the state is dependant on private power producers to prevent outages.
The Union Planning Commission statistics says that in 2001 the state had an installed capacity of 5,222MW, excluding central projects and wind power. The installed capacity in 2010-end was 5,705MW. During the same period, the installed capacities of Andhra Pradesh and Karnataka went up by 2,605MW and 2,496MW respectively. Many of the new thermal projects in TN were launched only in 2007 and 2009 and various factors have delayed them too.
"But for the purchase from private producers, the state would have had massive shortage. We entered into long term agreements with these producers to draw continuous power," said a senior official. On the allegations of getting power from high cost producers, he said, "The option of purchasing power from these four companies which use oil, naphtha and natural gas as fuel, is exercised only as a last resort. After exhausting all low-cost power purchase options, Tangedco in order to meet the shortage, is purchasing 2,950 million units at Rs 12.50 per unit. Though there is a long term agreement to purchase power from these sources, this option is utilized only during exam and festival seasons to meet the high demand," said the official.