Tariff hike: Tangedco revenue will rise, so will TN govt subsidy for utility

The increase in power tariff in Tamil Nadu has affected not only the public and the business community but also the state government, since the amount of subsidy the latter pays to Tangedco has significantly gone up as well.

Per data released by the Tamil Nadu Electricity Regulatory Commission (TNERC), the subsidy amount from the state government to Tangedco has been revised from ₹9,379.07 crore to ₹12,557.96  crore.

Domestic consumers’ subsidy will be ₹5,284.32 crore against ₹3,469.02 crore mentioned in the state budget for 2022-23. Similarly, the farmers’ subsidy will be ₹5,999.13 crore, against ₹4,019 crore. Thus, while the revenue for the government-owned Tangedco will increase, the government outgo will shoot up by a few thousands crores.

Also read: Electricity tariff in TN to be raised every year, Tangedco to lower debts

“The government of Tamil Nadu shall provide ₹12,557.96 to Tangedco for the financial year 2022-23 to compensate for the shortfall in revenue to the extension of free supply/reduction of tariff as per the policy direction. Tangedco shall extend free supply/collect reduced tariff as per the policy directives of the government of Tamil Nadu,” said TNERC in its order.

Election Commission move

The TNERC order has been issued at a time when the Election Commission (EC) is looking to ask political parties to provide authentic information in their manifestos on the financial viability of poll promises. The EC has written to political parties to provide authentic information to voters to assess the financial viability of their poll promises.

The TN state government’s burden increased after the 2016 Assembly elections, when former Chief Minister J Jayalalithaa announced that the first 100 units would be free for all domestic consumers. Already, the government was paying subsidies for providing free power to farmers and to more consumers like those living in huts, weavers etc., who also started to receive free power. The subsidy kept steadily climbing.

Also read: TN state depts, PSUs, local bodies owe Tangedco a whopping ₹3,474 cr

Subsidy for providing free power to hut consumers will be ₹288.45 crore and for temples, churches, mosques and other religious places the subsidy will be ₹15.56 crore. Subsidy for weavers using power looms will be ₹430.90 crore and for handloom weavers it will be ₹6.41 crore.

Consumption data

“Tangedco shall reconcile the subsidy allowed with the actual consumption and revenue assessed for 2021-22 and to furnish the report on or before October 31. While furnishing the actual consumption details, it should be ensured that slab-wise consumption is furnished correctly,” said the TNERC order.

The order asked Tangedco to furnish the actual connected load of agricultural consumers as on October 1 immediately, and the connected load as on October 1, before December 31.