A report by the Comptroller and Auditor General (CAG), tabled in the Tamil Nadu Assembly, has flagged that the state’s power utility incurred an additional expenditure of Rs 9,576 crore after procuring electricity from private generators at higher rates.
The audit noted that as of March 2023, Tamil Nadu’s total installed generation capacity stood at 35,036 MW, while the generation capacity under the state’s power generation and distribution utility was only 7,175 MW. The report said this dependence on external procurement contributed to recurring annual losses, with cumulative losses reported at Rs 1.62 lakh crore as of March 2023.
According to the CAG, inadequate maintenance led to outages at thermal power stations, which in turn forced higher-cost purchases from private sources, resulting in the Rs 9,576 crore additional burden. It also pointed to the North Chennai expansion plant’s lower performance and malfunctioning ash-handling systems, which allegedly caused an extra cost of Rs 131.58 crore.
The report further cited coal supply shortfalls and the purchase of coal at higher prices to bridge gaps, leading to an additional cost of Rs 3,941 crore, and noted that coal shortages were not computed for the period from 2001 to 2024. It also flagged extra costs of Rs 1,244.10 crore for not shifting from a fixed-price mechanism to an industry practice of variable pricing, and said accepting lower-grade coal led to avoidable expenditure of Rs 1,563 crore due to higher coal consumption.
In addition, the audit said materials worth Rs 2,020 crore for the Ramanathapuram Uppur thermal power project remained idle for over five years without any beneficial use. It also reported an additional cost of Rs 296 crore due to gas-based power stations consuming more gas than normal.
