TN hikes power tariff for large consumers

3% of users in the State to be affected.

Our Bureau

Chennai, July 31

The electricity bill for high-end residential consumers, industries, commercial establishments and private educational institutions is set to increase from August 1.

The power tariff increase will impact about 3 per cent of the consumers in the State.

Free power will continue for agriculture and hut connections. Power charges will remain unchanged for the majority of residential consumers (those consuming less than 600 units bi-monthly), commercial establishments using less than 200 units bimonthly, LT industrial units consuming less than 1,500 units bimonthly, cottage and tiny industries and places of worship.

Tariff has been cut for small shops and kiosks consuming less than 100 units bi-monthly.

The Tamil Nadu Electricity Regulatory Commission (TNERC) announced the latest power tariff regime on Saturday following a petition for revision of tariff by the Tamil Nadu Electricity Board in January. The earlier tariff revision was effected seven years ago.

Addressing a press conference on the revision, Mr S. Kabilan, Chairman, TNERC, said the tariff hike covers about 5.15 lakh connections out of the total 1.53 crore connections. The additional revenue to the TNEB is estimated at about Rs 1,651 crore in a full year. The State Government's subsidy outgo for power will be about Rs 1,652 crore.

Despite the hike in tariff electricity board will face an ‘uncovered gap' in revenue of about Rs 6,451 crore. The TNEB has asked for this to be treated as a ‘regulatory asset' which would give it an opportunity to recover the losses in the future through further tariff hikes.

In the TNEB petition it points out that the existing tariff revision procedure does not allow the recovery of shortfalls either automatically by the Board or through a mid-year tariff revision by the Commission. Thus the entire revenue loss incurred during the financial year has to be borne by the Board. The Board's intention is to minimise the rate shock to consumers and to maintain a smooth tariff trajectory to recover the costs. This is a model followed in Orissa, Haryana and Andhra Pradesh.

In the domestic segment, consumers using more than 600 units in a bimonthly billing cycle face a Re 1 hike/unit. While the tariff fixed by the TNERC is Rs 5.75 a unit against the prevailing Rs 4.75, the consumers get a Rs 1.70 a unit subsidy by the State Government.

The actual tariff will thus be Rs 4.05 a unit against Rs 3.05 earlier.

TNEB officials pointed out that the State Government will continue with its power subsidy regime to insulate the consumers from the power tariff hikes. Domestic consumers were among the biggest beneficiaries with a subsidy of Rs 1,270 crore.