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

The Tamil Nadu Electricity Regulatory Commission has allowed Tangedco to raise power tariff by 6% or based on inflation rate whichever is higher, every year.

Tangedco had urged the regulatory body to allow tariff revision every year till 2026-27.

“The applicable tariff (both fixed and energy charge) for FY 2022-23 shall undergo an inflation-based adjustment. The revision will be effective from July 1 of each of the subsequent years,” said the TNERC order.

This revision is applicable to all types of domestic consumers, commercial consumers, industries, hospitals and other sections of consumers.

“We have asked for an increase each year as only then will we be able to repay the debts. At present we will increase our revenue this year by ₹10,000 crore more but this is not enough to repay the debts,” said a senior Tangedco official.

The total debt of Tangedco is around ₹1.45 lakh crore and out of this, the majority of the debt is towards several thermal projects and transmission lines and constructing sub-stations.

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“Nearly 80% of the debt is in the form of loans from REC (Rural Electrification Corporation and Power Finance Corporation (PFC)) which have provided loans towards new thermal units coming up in North Chennai, Udangudi and other places. Similarly the funds from these two companies have been used towards setting up transmission lines, transformers as well as sub-stations,” said the official.

The present increase in tariff this year will be enough to pay power generators. “More than ₹15,000 crore is pending towards power generators both public and private. Unless we pay off at least 50% of this debt, it will be difficult to purchase power from these sources. This year’s revenue increase will take care of the debt of power generators,” said the official.

“The approval from TNERC will definitely help Tangedco to lower the overall debt. Not less than ₹1200 crore will be used to repay the debts and this will also help us lower the interest outgo,” said the official.

Tangedco is also working on lowering its expenditure. “We are speaking to banks and finance companies to lower the interest on various loans so that the overall interest cost comes down,” said the official.

Tangedco is also trying to optimize its power purchase. “At times the cost of power in the Electricity Exchange goes up to ₹10 per unit. But we are changing the way we purchase power from various sources, This way we will optimize the power purchase,” said the official.