The stage is set for the Tamil Nadu Electricity Regulatory Commission (TNERC) to start the process of revising power tariffs in the state once the new government gives its permission.
This follows Tangedco – the state electricity board – submitting its aggregate revenue requirement (ARR) for the financial year 2021-22 to the TNERC with a deficit of ₹16,000 crore.
The Union power ministry recently directed several state electricity regulatory commissions (SERCs) to receive the ARRs from Discoms and start the process of revising tariffs.
The ARR is an annual report presented by the Discom (Tangedco) to the SERC (TNERC). It shows the revenues and expenditure expected for the current financial year. If there is a gap between the expenditure and revenue, the TNERC has to start the process of increasing the tariff.
But not all SERCs are taking independent decisions on revising tariffs; the TNERC is also dependent on the government’s nod to being the process.
Once the ARR is presented, the TNERC must start the process of holding consultation meetings with consumers as well as consumer associations across the state.
The ARR will also be uploaded on the TNERC website for consumers to give their suggestions on revising the tariff.
After taking into consideration suggestions made by the consumers in the meetings and also on the website, the TNERC will revise the tariffs and pass a final order. The tariff were expected to be revised in 2020 after Tangedco presented the ARR but due to COVID lockdown as well as assembly elections, the tariff revision process could not be taken up.
The last time the tariffs were revised was in December 2014.
Though the TNERC has independent powers to take decisions on revising tariff, the commission is not ready to take a decision on its own and has been dilly-dallying for years. This has affected the finances of Tangedco.
The last revision did not help the Discom mop up the required revenue as the state announced 100 units of free power. This is in addition to the free power supplied to huts, weavers and farmers. Though the Discom gets subsidy from the government, there is a time lag between the supply of power and receipt of subsidy and this affects the working capital of Tangedco.
Will the new DMK government go ahead and revise the tariffs? Time alone will tell.