Report of Indian Institute of Public Administration ... - Ministry of Power

Background
CHAPTER - 11
TAMIL NADU
11.1 The Tamil Nadu Electricity Board (TNEB), one of the well-run Electricity
Boards in the country, is however, lagging behind most others in the reform
process. It still functions as a monolithic Board performing all the traditional
functions of an Electricity Board, namely, generation, transmission and
distribution. Its generation capacity is 5,400 MW out of which is 1,987 MW is
hydel, 2,970 MW is thermal and 424 MW is gas-powered. Since most of its
hydel stations are rain-dependent, they generate power of some significance only
during the monsoon season, and the Board uses the stored energy at other times
to meet the peak shortages. The Board has four thermal power stations with a
total installed capacity of 2,970 MW. Since Tamil Nadu does not have any
thermal coal resources, the board has to transport it from far-off coalfields
through a rail-cum-ship-cum-rail route. Transport of coal is a logistical
nightmare and also involves transport of huge quantity of ash over long distances
and its disposal later on at a huge cost with many environmental ramifications.
The board also purchases substantial power from the Central Power Utilities.
Five Independent Power Projects (IPPs), which have been commissioned in the
State, are also contributing to the financial woes of the Board. The Board has a
good and highly reliable transmission system (over 99%). Its distribution system
is quite large, covering the entire state of Tamil Nadu. The Board has electrified
94.90 per cent of villages in the State (As on 31 March 2006), and household
electrification is also very high (71.18%) due to the Board’s commitment to give
connection to all those who apply for it and the Government’s policy of free hut
service connection. The performance of the Board in this respect has been driven
by the political commitment of successive Governments. The State is highly
industrialised with nearly 70 per cent of its revenue coming from industries.
While the Board has been able to sustain the industrialisation of the State, the
industries too have been sustaining the Board by their major contribution to the
Board’s income. The quality and reliability of power to industries is not a major
concern, but the cost is, which is driving industries to go in for alternatives such
as wind energy, captive generation, etc.