Mon Nov 03 00:00:00 UTC 2025: ## Tamil Nadu Electricity Regulator Orders Audit Amid Mounting Power Debt

Chennai, November 3, 2025 – The Tamil Nadu Electricity Regulatory Commission (TNERC) is taking steps to address the significant issue of regulatory assets (RA) accumulated by the state’s power distribution companies. Facing a Supreme Court mandate to liquidate these legacy debts within four years, TNERC has requested the Principal Accountant General in Chennai to appoint an audit party for an intensive review of the circumstances leading to the persistent accumulation of RAs.

Regulatory assets represent costs incurred by power distribution companies that haven’t been recovered in a timely manner. The Supreme Court has capped the creation of new RAs at 3% of the Annual Revenue Requirement (ARR) and tasked the Appellate Tribunal for Electricity (Aptel) with monitoring and enforcing accountability.

According to a petition filed by TNERC with Aptel, Tamil Nadu’s power utilities are burdened with a staggering ₹83,000 crore in regulatory assets.

In a related development, the state government has ordered the restructuring and bifurcation of the Tamil Nadu Generation and Distribution Corporation Limited (Tangedco) into three separate entities: the Tamil Nadu Power Generation Corporation Limited (TNPGCL), the Tamil Nadu Green Energy Corporation Limited (TNGECL), and the Tamil Nadu Power Distribution Corporation Limited (TNPDCL).

The existing RA has been allocated to these new companies as follows:

  • TNPGCL: ₹22,110.16 crore (27%)
  • TNGECL: ₹1,851.71 crore (2%)
  • TNPDCL: ₹59,038 crore (71%)

TNERC is currently in discussions with the state government and TNPDCL to develop a plan for liquidating the ₹59,038 crore RA attributed to the distribution company within the Supreme Court’s stipulated timeframe. The roadmap will be submitted upon finalization.

The regulator emphasized the need for an audit to determine the underlying causes of the persistent RA accumulation. They are actively consulting with the state government and the power distribution company to resolve the issue and requested time to finalize a solution.

The issue of regulatory assets is a widespread problem across India. According to ratings firm ICRA, the all-India RA position remains elevated at ₹3 lakh crore, with Tamil Nadu being a major contributor along with Uttar Pradesh, Rajasthan, Maharashtra, Delhi, West Bengal, and Karnataka.

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