Tamil Nadu Electricity Regulatory Commission (TNERC) on 11-12-2014 announced a tariff hike of 15 per cent for all categories of consumers including domestic consumers with effect from 12-12-2014, a release said. However, Chief Minister O. Panneerselvam announced that the state government will absorb the tariff hike for domestic consumers, who consume between 0-500 units, hut, handloom, powerloom, agriculture and places of worship with subsidy.
The worst affected by the hike are domestic consumers who consume more than 501 units. They have to shell out 85 paise more for every unit consumed by them. The tariff for consumers has gone up to Rs6.6 per unit from Rs5.75 per unit.
Tariff is hiked for consumers who consume less than 500 units between 40 paise and 60 paise but the hike will be covered under the government subsidy. Interestingly, the commission has adopted the same tariff proposed by it under the suo motu tariff hike proposal for the low-tension consumers while it has reduced the tariff for high-tension consumers. Under the order, tariff for HT industries has increased to Rs6.35 per unit from Rs 5.5 per unit while commercial consumers will be paying Rs 8 per unit.
In a statement, the Chief Minister said the government has absorbed the increase for 94 per cent of domestic consumers who consume less than 500 units.The government will incur additional expenditure of Rs 825 crore due to the additional subsidy for the domestic consumers, he said.Adding that following the suo motu tariff revision order, the government will be paying a total subsidy of Rs 6,295 crore to the Tamil Nadu Generation and Distribution Corporation, against the existing subsidy of Rs4,985 crore.
In the wake of the suo motu tariff revision effected by the commission, Tangedco's existing revenue gap will come down to Rs 222 crore from Rs5,447 crore, said government sources. It may be noted that TNERC has determined a revenue requirement of Rs39,818 crore, against its revenue of Rs 32,964 crore for 2014-15 at existing tariff. It has proposed to reduce the deficit to '49 crore through the tariff hike.