CHENNAI: The cost of power purchase by the Tamil Nadu Power Distribution Corporation Limited (TNPDCL) has increased sharply over the past five years, mainly due to rising electricity demand and higher sourcing costs. The expenditure has gone up from Rs 47,145 crore as on March 31, 2020, to Rs 75,960 crore as on March 31, 2025, an overall increase of about Rs 28,814 crore.
According to the 16th annual report, the state-run power utility spent around Rs 75,960 crore on buying electricity during the financial year 2024-25. This is about Rs 1,500 crore more than the previous year (2023-24) when the TNPDCL had purchased power worth Rs 74,348 crore.
Officials said the steady rise in power purchase cost reflects higher demand for electricity across the state and the growing expenses involved in sourcing power from different agencies to meet consumer needs.
The 16th annual report, accessed by TNIE, shows that the TNPDCL purchased 1,14,420 MU (million units) of power from various sources during 2024-25. However, it sold only 96,803 MU, earning a revenue of Rs 61,911 crore. The transmission and distribution loss during the year stood at 17,617 MU.
A senior official told TNIE that the utility has managed to reduce Aggregate Technical and Commercial (AT&C) losses from 11.82% in 2020-21 to 10.73% in 2024-25. “We expect the losses to fall below 10% in the current financial year 2025-26. However, it is difficult to reduce private power purchase as electricity demand continues to rise,” the official said.
The official added that power purchase costs can come down in the coming years as the state is focusing on renewable energy generation and Battery Energy Storage Systems (BESS).
Another official, speaking on condition of anonymity, said the discom spent Rs 20,629 crore on power purchase from traders and power exchanges, which is significantly higher compared to purchases from central generating stations and the Tamil Nadu Power Generation Corporation.
“During peak hours and summer months, huge amounts are spent on buying power from exchanges. This can be reduced by entering into more short-term agreements and swap arrangements,” the official said.