State Minister for Transport and Electricity, SS Sivasankar
| Photo Credit:
Siva SaravananS
Over the next 5 to 7 years, Tamil Nadu will require over ₹2 lakh crore in investments across power generation, transmission and distribution. A new comprehensive debt restructuring scheme, with joint participation from the Union and State governments, is essential, said State Minister for Transport and Electricity, SS Sivasankar.
The minister, speaking at Group of Ministers on the financial viability of Electricity Distribution Companies in New Delhi on Monday, also emphasised the need for special grants to be provided under the 16th Finance Commission.
The meeting was chaired by the Union Minister for Power, Housing and Urban Affairs, Manohar Lal, and the Union Minister of State for Power and New & Renewable Energy, Shripad Yesso Naik, says a State government release.
Tamil Nadu has emerged as a pioneer in the energy sector, implementing several significant achievements and reforms. He highlighted that, a Multi-Year Tariff regime linked to the Consumer Price Index (CPI), with automatic annual increases, has been introduced in Tamil Nadu.
The minister said TANGEDCO has been unbundled into separate companies for Generation, Green Energy and Distribution. Aggregate Technical and Commercial (AT&C) losses, which stood at 18.73 per cent in 2017-18, have been reduced to 10.73 per cent in 2024-25.
Artificial Intelligence is being employed for demand forecasting and power purchase planning. Through negotiations with REC and PFC, interest rates have been reduced by 0.5 per cent. The ACS-ARR gap has narrowed to just ₹0.04 per unit, and payable days have been reduced from 146 to 49, he said.
The minister urged that interest rates from REC and PFC be reduced by at least 1.5 per cent. Net metering for rooftop solar must transition to a net feed-in system. For open access consumers, banking charges should be aligned with the cost differentials between procurement and adjustment time slots, or settlement should be permitted within the same time slot.
Tamil Nadu has been heavily burdened by increased Inter-State Transmission System charges arising from exemptions for renewable energy, General Network Access-based sharing, and upcoming green hydrogen projects. To address this, the Minister recommended adoption of the “User Pays” principle and discontinuation of waivers for commercially mature renewable technologies. He urged that the Raigarh-Pugalur-Trissur High-Voltage Direct Current transmission line be recognised as a strategic national asset, with charges determined accordingly.
The minister also pressed for reduction of SECI’s trade margin, immediate notification of the Captive Generation Scrutiny procedure by State Regulators, and priority status for electricity dues under the IBC resolution process. Additionally, he called upon the Reserve Bank of India to permit extension of loan tenors to match asset life, increase the ECB limit under the automatic route to ₹25,000 crore per year, and exempt capital gains tax on transmission asset monetisation transactions.
Published on September 15, 2025