Centre-states sharing debt key for good show: Minister Sivasankar

CHENNAI: Electricity Minister SS Sivasankar on Thursday reiterated the State’s demand for a comprehensive debt restructuring scheme for power distribution companies (Discoms) at the Southern Region Power Ministers’ Conference, urging that the financial burden be shared between the Centre and states to ensure effective implementation.

Speaking at conference held in Bengaluru, Sivasankar emphasised the need for a coordinated and accountable approach to revive the financial health of Discoms. “The burden of take-over of the debt must be shared between the states and the Centre for better uptake of the scheme,” the minister said, adding that such a programme must be linked to financial reforms to avoid fresh accumulation of debt.

Highlighting Tamil Nadu’s own efforts in stabilising its power sector, he cited nearly Rs 1.05 lakh crore in subsidies and loss funding to Tamil Nadu Generation and Distribution Corporation (TNPDCL) over the past four years. “Our government has demonstrated an unwavering commitment to ensuring reliable and affordable electricity,” he said.

The minister pointed to Tamil Nadu’s introduction of a multi-year tariff (MYT) regime linked to the consumer price index, a first such initiative in India, and the restructuring of Tangedco into separate entities for generation, green energy, and distribution and noted significant operational improvements, including a reduction in Aggregate Technical & Commercial (AT&C) losses from 19.47% in 2017–18 to 11.39% in 2023–24.

Tamil Nadu is investing heavily in energy storage, with nearly 20,000 MW of pumped hydro and battery storage systems in the pipeline, to meet growing demand and transition to clean energy, the minister asserted. He stressed the importance of these steps in reducing peak-hour power purchase costs and improving grid stability.

He cautioned that sustaining momentum would require over Rs 2 lakh crore investments across the power value chain over the next 5-7 years. He urged the 16th Finance Commission to earmark dedicated grants for the power sector, while also calling for lower borrowing rates from central agencies.

The minister also raised several policy concerns, including the need to rationalise transmission tariffs, re-examine renewable purchase obligations (RPOs), and allow states flexibility in power procurement planning based on their unique load profiles. “Our energy future hinges not just on generation, but on financial resilience and smart policy,” he said.