Tamil Nadu: Ombudsman directs IOCL to pay Rs 7.64 crore minimum power charges

CHENNAI: The Tamil Nadu Electricity Ombudsman has upheld a demand by Tamil Nadu Power Distribution Corporation Limited (TNPDCL) asking Indian Oil Corporation Limited (IOCL) to pay Rs 7.64 crore towards monthly minimum electricity charges and late payment surcharge for its Integrated Lube Complex at Amullavoyal in Manali.

In an order dated November 5, Electricity Ombudsman K Indirani rejected IOCL’s appeal challenging the levy of minimum charges, ruling that TNPDCL was justified in raising the demand even though the proposed 110/33/11 kV substation within the company’s premises had not been established.

The ombudsman upheld the order of the Consumer Grievance Redressal Forum (CGRF), which had quantified the monthly minimum charges at Rs 9.22 crore and the late payment surcharge at Rs 1.49 crore, taking the total liability to Rs 10.71 crore. After adjusting Rs 3.07 crore already deposited by IOCL following a Madras High Court direction, the outstanding amount works out to Rs 7.64 crore.

The dispute relates to the 8,000 kVA high-tension (HT) electricity connection sought by IOCL for its Integrated Lube Complex. The company had paid Rs 7.02 crore towards estimate charges, development charges and meter caution deposit in January 2023.

TNPDCL completed the electricity supply extension works on June 20, 2023, and issued a Supply Availability Notice the following day, making monthly minimum charges applicable from June 20, 2023. As IOCL did not immediately avail the connection, the utility raised a demand of Rs 6.14 crore for the period between June 20, 2023, and June 30, 2024.

IOCL challenged the demand, arguing that TNPDCL had failed to establish the proposed substation on the 4,000 sq metre land provided by the company on a 30-year lease. It also alleged that delays in shifting extra-high tension (EHT) power lines had affected the project schedule and escalated its project costs.

However, TNPDCL maintained that it had completed the necessary works to extend the sanctioned power supply through an interim arrangement involving the existing Manali substation. It also pointed out that IOCL’s internal electrical installations were not ready to receive power when the Supply Availability Notice was issued.

The ombudsman observed that the approved interim arrangement for extending the 8,000 kVA supply through the existing Manali substation was independent of the proposal to establish a new substation within IOCL’s premises. Therefore, the non-establishment of the proposed substation did not invalidate the Supply Availability Notice.

The order also noted that IOCL had informed TNPDCL in June 2023 that its internal HT cable and substation works were still in progress. The company submitted the Chief Electrical Inspector to Government (CEIG) safety certificate only on April 4, 2024. The HT connection was eventually effected on February 24, 2025.

Holding that the delay in availing the sanctioned supply was attributable to the company’s readiness to receive power, the Ombudsman said there were no grounds to interfere with the CGRF’s determination of monthly minimum charges and surcharge.