Tamil Nadu electricity tariffs increased for customers as discom faces losses

Electricity will no cost more in Tamil Nadu as the state's power distribution company (discom), annonced a hike in tariff to make up for financial losses, ANI reported, citing a press statement from the Tamil Nadu Generation and Distribution Corporation (TANGEDCO).

As per the multi-year electricity tariff order of the Tamil Nadu Electricity Regulatory Commission (TNERC), electricity tariff has been increased for consumers by 2.18 per cent from July 1. This is bases of the consumer price index number, and has been scaled to 2.18 per cent against 4.7 per cent for all electricity connections, “considering the welfare of consumers”, as per the release.

It is worth noting that this 2.18 per cent increase for houses is entirely covered by the government's electricity subsidy.

As per the rules of the TNERC, the electricity tariff was hiked only by 2.18 per cent last year even though there was a possibility to increase the electricity tariff by up to 5 per cent, the release added.

Financial Loss

TANGEDCO, which is the Tamil Nadu state power discom, in the release said that total financial loss in FY12 was was ₹18.954 crore, which has increased to ₹94,312 crore in the last 10 years.

The statement added that the TANGEDCO has been “forced” to take loans from financial institutions and banks due to non-commitment in the past, like the current Tamil Nadu government's commitment of 100 per cent government absorption from 2021-22.

As a result, the loan amount of ₹43,493 crore to TANGEDCO and the Power Network Corporation in FY12 has increased three times in the last 10 years to ₹1,59,823 crore till (FY22).

As a result, net interest on loans increased by 259 per cent from ₹4,588 crore in FY12 to ₹16,511 crore in FY21, the release added.

Union Government Rules

The press release noted that the government has been implementing small electricity tariff hikes every year so that the consumers do not have a major impact due to tariff hikes.

According to the guidelines of the Union Ministry of Power, annual electricity tariff revision is a pre-condition for availing central government funds under the Strengthening of Distribution System (RDSS) scheme.

Meanwhile, opposition party leaders such as All India Anna Dravida Munnetra Kazhagam (AIADMK) General Secretary Edappadi Palaniswami and Bharatiya Janata Party (BJP) State President Annamalai condemned the Dravida Munnetra Kazhagam (DMK) led Tamil Nadu government for the power tariff hike.

(With inputs from ANI)