Power regulator proposes tariff hike in TN

The proposed hike is to address the revenue gap of Rs 6,854 cr for the Tamil Nadu Generation and Distribution Corporation

The Tamil Nadu Electricity Regulatory Commission (TNERC) has proposed power tariff hike across all the consuming categories. This is for the first time the commission has taken a suo motu decision to revise the tariff in the wake of Tangedco's failure to do so.

The commission said the proposed hike was to address the revenue gap of Rs 6,854 crore for the Tamil Nadu Generation and Distribution Corporation (Tangedco).

"As per the financial restructuring plan requirement, the tariff is to be revised every year covering the aggregate revenue requirement," the commission said.

The TNERC has proposed a tariff increase of 15 per cent (average) for domestic consumers, 31 per cent for industries and 15 per cent for commercial users. For government and state-aided educational institutions a hike of 60.44 per cent has been proposed.

For the temporary supply segment, which is used by builders, the hike is 15.78 per cent. The hike is determined after taking into consideration factors including the present energy charges for each segment. In addition to the proposed hike, an increase of Rs 10 (bi-monthly) in fixed charges has been proposed for domestic users.

For domestic consumers, the proposed hike per unit ranges between 40 paise and 85 paise depending on the power consumed. For the industry, it has been proposed to hike by Rs 1.72 to Rs 7.22 per unit while for commercial users, it is Rs 8.05 per unit from the current Rs 7.

Fixed charges has also been proposed to be hiked for different categories of consumers.

The TNERC issued the public notice following an increase in coal price to Rs 3,298 per tonne, hike in the price of imported coal to Rs 6,896 per tonne, hike in expenditure related to employee salaries and pension to Rs 4,370 crore and the increasing burden of interest on loans taken by the TNEB for generation and distribution that works out to Rs 8,643 crore.

Reacting to the proposal, chief minister J Jayalalithaa said her government would provide subsidy for the poor so that they are not burdened by the proposed hike.

The final tariff rates will be notified after hearing from the public, the commission stated. According to the commission, the gross aggregate revenue requirement is Rs 39,818 crore. After deducting the other income and non-tariff income, the net revenue requirement is Rs 39,092 crore. Revenue from tariffs, including subsidy (at existing tariff), is Rs 32,238 crore leaving a gap of Rs 6,854 crore.

Incremental revenue through tariff revision could be Rs 6,805 crore, it said, adding the revised revenue gap (at revised tariff) would be Rs 49 crore.