Tamil Nadu must improve power demand forecast, cut costs with timely buys

Tamil Nadu’s decision to buy emergency electricity at rates reaching ₹37 a unit raises questions about its power procurement strategy. The government must ensure uninterrupted supply while keeping costs in check through timely contracts. With annual power purchases accounting for roughly three-quarters of the Tamil Nadu Power Distribution Corporation Limited’s (TNPDCL) total income, avoiding unnecessary expenditure is particularly important.

The circumstances that left the state facing such prices deserve examination, particularly when a senior official familiar with procurement discussions says warnings were raised as early as July. The government’s explanation merits consideration. Electricity Minister C T R Nirmal Kumar has cited unusually high October demand and shortfalls in supplies from central generating stations and wind power to justify costly purchases to prevent outages. Power utility officials say purchases can be reduced if demand falls, though fixed charges would still apply.