The power sector continues to give nightmares to the ruling DMK in Tamil Nadu. In 2011, when the party suffered a crushing defeat at the hands of the AIADMK, persistent power cuts across the state were blamed as one of the prime reasons.
The industrialised state, which has always grappled with power shortages, had somehow managed the show while incurring a huge debt burden. But in the cruel summer of 2011, scheduled power cuts of up to three hours and frequent unscheduled outages during the election season sealed the DMK’s fate. While many stalwarts floundered, M K Stalin, then the deputy chief minister, won with a narrow margin of 2,800 votes from Kolathur.
This summer is unforgiving too. But the ruling DMK is not leaving any stones unturned. Tangedco, the loss-making state power utility, has the unenviable task of ensuring a steady supply without burning a big hole in its kitty. The state has apparently recorded a 50 percent drop in hydropower generation in 2023-24 from the previous year.
The state-owned hydropower plants produced a little over 3,000 million units in 2023-24, making it the lowest output in seven years. Lack of water from Karnataka and scanty rainfall in the western districts, where most of the hydropower plants are located, have created the mess. For Tangedco, which pays over Rs 13,000 crore a year in interest on loans, the drop in production is indeed crucial.
Since the demand has shot up, the company has been scrambling to lap up electricity from outside the state. In anticipation of a further spike in demand, the utility has signed power purchase agreements with private players to procure about 4,500 MW up to May. For the four months between February and May, Tangedco’s power purchase cost has hit a record high of Rs 4,600 crore, almost twice the Rs 2,400 crore spent during the same period last year.
While Tangedco is yet to finalise the accounts, its power procurement cost for 2023-24 is projected to reach Rs 65,000 crore. There is only one way electricity consumption will go in the coming weeks, possibly forcing the company to shell out even more this fiscal. The move to restart the practice of collecting security deposits after a gap of two years may not bode well with the state’s domestic consumers. But Tangedco may not have too many options at hand.