Tamil Nadu power distribution company increases electricity tariff to cover financial loss

The Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) said that it has been compelled to increase the electricity tariff to cover increasing financial loss.

The state power distribution company said that the total financial loss of the Tamil Nadu Power Generation and Distribution Corporation, which was Rs 18.954 crore in 2011-12, increased to Rs 94,312 crore in the last 10 years, TANGEDCO said in a press release.

The release said that Tamil Nadu Power Generation and Distribution Corporation 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 Rs 43,493 crore to Tamil Nadu Power Generation and Distribution Corporation and Power Network Corporation in 2011-12 has increased three times in the last 10 years to Rs 1,59,823 crore till (2021-22).

As a result, net interest on loans increased by 259 per cent from Rs 4,588 crore in 2011-12 to Rs 16,511 crore in 2020-21, the release said.

The press release said that considering the burden that may be caused to the electricity consumers due to the increase in electricity tariffs, the government has been implementing small electricity tariff hikes every year so that the consumers do not have a major impact.

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

As per the multi-year electricity tariff order of the Tamil Nadu Electricity Regulatory Commission, from 01.07.2023 on the basis of consumer price index number, against the increase of 4.7 per cent for all electricity connections, only 2.18 per cent has been raised considering the welfare of consumerss, the release said.

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 Tamil Nadu Electricity Regulatory Commission, 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 said.

Meanwhile, opposition party leaders like 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.

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