Former AIADMK Minister Thangamani dismisses Thennarasu’s allegation over UDAY being responsible for power tariff hike in T.N.

AIADMK leader defends UDAY scheme, refutes power tariff hike allegations, challenges direct debate with Finance Minister.

The AIADMK organisation secretary and former Minister of Electricity, P. Thangamani, on Wednesday, July 24, 2024 rebutted the allegation of Finance and Electricity Minister Thangam Thennarasu that the previous AIADMK government’s decision to join the Ujwal DISCOM Assurance Yojana (UDAY) scheme was responsible for the latest power tariff hike. 

On July 23, the AIADMK conducted “successfully” a State-wide agitation against the latest power tariff hike and “unable to stomach” this, Mr. Thennarasu sang the “old tune” of the UDAY scheme being responsible for the tariff increase, Mr. Thangamani observed in a statement

Explaining features of the scheme, Mr. Thangamani asserted that it was because of the scheme that the Tamil Nadu Power Distribution Corporation Limited (TNPDCL), one of the successors of the Tamil Nadu Generation and Distribution Corporation (TANGEDCO), was “alive and kicking.”

As part of the scheme, while the Tamil Nadu government took over the TANGEDCO’s loan of ₹22,815 crore, it provided government guarantee for the remaining outstanding amount of ₹7,605 crore to the power utility for mobilisation of funds through issue of bonds to repay the debt. Thus, the loan burden of ₹30,420 crore was eased. 

Of the amount taken over by the government, a grant of ₹4,563 crore was given by the government to the utility every year, beginning from 2017-18 to 2021-22. As a result of the government absorption of the loan, the erstwhile TANGEDCO had saved interest of ₹2,882 crores per annum.

It was estimated that Tamil Nadu would derive an overall net benefit of approximately ₹ 11,000 crore through UDAY, by way of savings in interest cost, reduction in AT&C [aggregate technical and commercial] and transmission losses, interventions in energy efficiency and coal reforms. If, still, the power utility suffered a loss, the State government would absorb 50% of the loss, Mr. Thangamani explained.

Before signing the Memorandum of Understanding under the UDAY Scheme in January 2017, the then AIADMK government got exemption from the installation of meters for agricultural and hut connections, and the quarterly hike of power tariff. Besides, it got the nod for the continuance of free power supply up to 100 units bimonthly for domestic consumers; a similar scheme for handlooms and powerlooms.