Tamil Nadu: Power bill to go up by 3% from July; govt likely to absorb increase
The revised tariffs will apply to both Low Tension (LT) and High Tension (HT) categories, impacting domestic, commercial, industrial, and public utility consumers.
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CHENNAI: Tamil Nadu’s electricity tariff is likely to be increased suo motu by 3.16% from July 1, 2025, under the annual CPI-linked adjustment framework adopted by the Tamil Nadu Electricity Regulatory Commission (TNERC).
The provisional year-on-year inflation for April 2025, measured by the All India Consumer Price Index (CPI), stood at 3.16% — the lowest since July 2019 — triggering an automatic tariff revision as per TNERC's 2022 multi-year tariff order.
This modest increase follows similar hikes of 4.83% in July 2024 and 2.18% in July 2023. The TNERC’s tariff policy, introduced in Tariff Order No. 7 of 2022, mandates annual revisions based on the April CPI figure, subject to a maximum cap of 6%.
The revised tariffs will apply to both Low Tension (LT) and High Tension (HT) categories, impacting domestic, commercial, industrial, and public utility consumers. However, as in previous years, the state government is expected to fully subsidise the increase for domestic users and other subsidised categories, shielding them from any direct impact, sources said.
Since the introduction of the CPI-linked tariff formula, TANGEDCO’s sales revenue has risen sharply. In FY 2021-22, before the first major tariff revision, the utility sold 82,002 million units of electricity and earned ₹45,953 crore. Following the steep hike in September 2022 and a full year of higher rates, sales in FY 2022–23 rose to 87,916.64 MU, lifting revenue to ₹60,505.37 crore – a 32% increase.
A second adjustment in July 2023, combined with rising demand, pushed FY 2023-24 sales to 93,380 MU, with revenue reaching ₹71,614 crore — an additional 18% rise. Together, the two CPI-based revisions boosted TANGEDCO’s annual sales income by roughly ₹25,600 crore over two years while helping reduce its revenue gap.
In line with the CPI-linked formula, the TNERC is also expected to increase non-tariff-related miscellaneous charges for 2025-26 by 3.16%. These include fees for new service connections and other administrative charges. While the government continues to subsidise electricity tariffs for domestic users, the periodic increase in miscellaneous charges over the past four years has become a significant burden for consumers applying for new connections.
In 2021–22, non-tariff revenue stood at ₹2,722 crore, which rose to ₹4,303 crore in 2022-23 — an increase of 58%. In 2023–24, it climbed further to ₹6,628 crore, marking a 54% rise.