Power tariff hike: Govt told to pay Rs 777 cr in excess to TNPDCL

CHENNAI: The Tamil Nadu Electricity Regulatory Commission (TNERC) has directed the state government to provide an additional subsidy of Rs 777.56 crore to the Tamil Nadu Power Distribution Corporation Ltd. (TNPDCL), following the latest tariff hike that came into force on July 1 this year.

The directive raises the subsidy burden of the government to Rs 16,068.50 crore for 2025–26, up from Rs 15,291 crore in the previous year. The increase stems from the State's decision to absorb the 3.18% hike in tariffs, linked to the consumer price index under the multi-year tariff formula, and to continue extending free power to farmers along with subsidised supply to several consumer categories.

According to TNERC's calculations based on TNPDCL's communication, domestic consumers alone will account for Rs 470.39 crore of the additional subsidy. Free supply for agricultural connections requires another Rs 167 crore, while hut consumers will receive an extra subsidy of Rs 8.40 crore.

Although the tariffs were revised in line with inflation, the government exempted certain categories from the impact of the hike. These include domestic consumers, cottage and tiny industries, powerloom units, industries with sanctioned load up to 50 kW, and commercial establishments with bi-monthly consumption not exceeding 500 units. The State has committed to bearing the 3.16% increase in subsidy for these groups.

In its order, TNERC has instructed the government to release the subsidy before the commencement of each quarter. It further directed TNPDCL to reconcile the subsidy allowed with actual consumption and revenue assessed during the relevant quarters, and to submit the reconciliation report within 60 days. It highlights the increasing financial commitment required of the State to shield priority consumer categories from tariff hikes, while ensuring TNPDCL's revenue requirements are met.