Tamil Nadu Electricity Minister Sivasankar seeks a new comprehensive debt restructuring scheme for discoms

Tamil Nadu Electricity Minister S.S. Sivasankar said on Monday that a new comprehensive debt restructuring scheme, with the participation of the Union and State governments, would be essential for State power distribution companies.

In his special address at the Group of Ministers meeting of the State Electricity Ministers in New Delhi, he also stressed the need for special grants under the 16th Finance Commission. Over the next five to seven years, Tamil Nadu would require more than ₹2,00,000 crore in investment across generation, transmission, and distribution, Mr.  Sivasankar said. He urged that interest rates levied by REC and PFC be reduced by at least 1.5%.

“Net metering for rooftop solar installations 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,” he said.

The ‘user pays’ principle

Tamil Nadu was heavily burdened by increased Interstate Transmission System charges arising from exemption for renewable energy, GNA-based sharing, and the upcoming green hydrogen projects, he said. To address it, the Minister recommended adoption of the ‘user pays’ principle and discontinuation of waivers for commercially mature renewable technologies.

He further urged that the Raigarh-Pugalur-Trissur high-voltage direct current transmission line be recognised as a strategic national asset, with charges determined accordingly.

Mr. Sivasankar pressed for reduction of Solar Energy Corporation of India Limited’s trade margin and priority status for electricity dues under the insolvency and bankruptcy resolution process, among other measures.

Extension of loan tenors

He called upon the Reserve Bank of India to permit extension of loan tenors to match asset life, increase the external commercial borrowing limit under the automatic route to ₹25,000 crore a year, and remove the capital gains tax on transmission asset monetisation transactions.

The Minister recalled that Tangedco was unbundled into separate companies for generation, green energy, and distribution. Aggregate technical and commercial losses, which stood at 18.73% in 2017-18, had been reduced to 10.73% in 2024-25, he said.