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Signalling the first move towards unbundling of Tamil Nadu power sector, state government formed a separate entity – TN Transmission Corporation (TNTRANSCO), to handle power transmission in the state. The company was registered with the registrar of companies. Vijayan, treasurer of the CITU-affiliated Central Organisation of Tamil Nadu Electricity Employees said employees would prefer the Kerala model, where the state government is resisting the need to form different transmission, distribution and generation companies by mooting the idea of converting the Kerala State Electricity Board into a company and vesting the board's functions in a single entity.

This is part of the unbundling process under the Electricity Act, for the state owned TN electricity board (TNEB). Official sources indicated that another company, TN generation and distribution corporation (TNGENDISCO), is in the process of being formed. TNEB will, then, be the holding company, with 100% stake in both the corporations.

The DMK government has moved quickly to set in motion the reform process in the energy sector, soon after getting a strong mandate in the recent Lok Sabha elections. While presenting a tax-free soft budget for 2009-10, the state government also did not revise power tariffs. It was then expected after the elections that the government will take steps to increase user charges.

At the same time, industry sources welcome the move to separate distribution and transmission. The state has a more than 2 crore consumer base, the highest in India and is ranked as one of the top three industrialized and urbanized states in the country.

Employee unions felt that the process of creating new entities for different functions now carried out by the board is likely to affect the service conditions of employees. Moreover, when the assets and liabilities were valued, the unions would also need to be consulted.

Under Sec 131 of the Electricity Act, 2003, the property of the state-owned power utility should be vested in the state government. Thereafter, the assets should be transferred to other newly created entities. This provision could be invoked to form a company on the Kerala model. "If the government moots such a proposal, the Centre should accept it," he said.


While the state is passing through a demand supply gap, TNEB is executing projects worth Rs.36000 crore. It has also approved investment fo Rs 1500 crore by way of modernization and installation of Co-Gen plants of 234 MW capacity in 17 co-operative sugar mills.

In 2009-10, against the projected installed capacity of 11,371 MW, and projected demand of 11,675 MW, the availability is pegged at 10,443 MW. By 2011-12, the state is expected to have an installed capavity of 15167 MW, projected demand of 14224 MW and availability of 13176 MW.


Source- Times of India