Front Page

Panel to study TNEB restructuring

CHENNAI: A committee of senior government officials is to be constituted to study the issue of restructuring the Tamil Nadu Electricity Board (TNEB).

The panel, comprising Energy Secretary and TNEB officers, may prepare a scheme of transfer of assets and liabilities of the TNEB to entities that are to be created in the event of re-organisation of the Board.

Sources say the Cabinet, which met in the evening, decided to go in for the formation of the committee and wait for its findings before taking a final decision on the matter. Chief Minister M. Karunanidhi chaired the meeting.

Last week, Electricity Minister Arcot N. Veeraswami held a meeting with the representatives of trade unions and ascertained their position on the issue of restructuring.

As a matter of principle, the unions are against the idea of unbundling.

Indications are that the State will seek time for restructuring the TNEB till the panel gives its report.

The present deadline expires on October 9.

Under the 2003 Electricity Act, State Electricity Boards are not allowed to retain their existing monolithic character of power production, transmission and distribution.

The rationale behind this stipulation is that utilities engaged in transmission are barred from trading in electricity to ensure non-discriminatory open access.

In effect, a power generator can be a distributor or vice versa but neither a generator nor a distributor can be a transmitter.

Since the Act came into force in June 2003, the State has been securing time for unbundling its power utility.

While communicating its decision to extend the deadline, the Union Power Ministry, in its letter of September 26, wanted Tamil Nadu to complete the process of separating the transmission function separately under a new corporate entity with a clear road map for further reorganisation of the Board soon thereafter.

It stated that the separation would give overall functional autonomy to the new organisations and would lead to improved functioning, particularly in the distribution segment.

Citing section 38 of the distribution code, the Electricity Board will ask high tension and low tension current transformer services not to draw power from the State grid between 6 p.m to 10 p.m.

A source says this decision will come into force on October 9.

The government has conveyed its approval to the TNEB.

Approximately 25,000 consumers will be covered under the latest direction.

Essential services such as hospitals, water supply and milk chilling units have been exempted.

© Copyright 2000 - 2009 The Hindu