TNPDCL begins annual security deposit review, industry fears fresh financial burden

CHENNAI: In the face of mounting criticism from domestic consumers over steep EB bills, Tamil Nadu Power Distribution Corporation Limited (TNPDCL) has initiated its annual review of Additional Security Deposit (ASD) for High Tension (HT) consumers and select Low Tension (LT) industrial service connections, a move that industry bodies fear will further strain micro, small and medium enterprises (MSMEs).

In a circular issued on July 30, TNPDCL directed field officials to review the adequacy of security deposits maintained by HT consumers and LT Current Transformer (LTCT) and IIIB industrial consumers for 2026-27 based on EB charges paid during the preceding 12 months.

Although the ASD exercise does not cover domestic consumers, industrial units whose power bills have increased over the past year are likely to receive higher ASD demands as the security deposit is directly linked to average annual electricity charges. Industry representatives said the timing could not have been worse.

Federation of Coimbatore Industrial Associations (FOCIA) coordinator J James said that the MSMEs were already reeling under higher power costs following the steep increase in fixed charges for LTCT consumers during the recent tariff revision.

“We urge TNPDCL not to impose another financial burden through the ASD review. The 450% increase in fixed charges for LTCT consumers has already hit MSMEs hard. We met Chief Minister C Joseph Vijay on July 23 and sought withdrawal of the hike along with other industry demands. Any additional burden will affect nearly 13 lakh micro industries and around 80 lakh workers who depend on the sector,” James told DT Next.

Under the TN Electricity Supply Code, consumers under monthly billing are required to maintain a security deposit equivalent to two months’ average EB charges during the previous 12 months, while those under bi-monthly billing must maintain a deposit equal to 3 months’ average charges. Consumers who are not owners of the premises and cannot produce the property owner’s consent letter are required to maintain higher security deposits.

Before reviewing the adequacy of deposits, TNPDCL has credited interest at 6.71% for 2025-26 on existing security deposits. It has also approved payment of interest at the same rate on Meter Caution Deposits for HT consumers through adjustment in future electricity bills.

The utility has directed officials to issue separate ASD notices, while EB bills and invoices will carry details of the existing security deposit, interest credited and additional amount payable. Consumers will have 30 days to pay the revised deposit, failing which Belated Payment Surcharge will be levied. Continued default could lead to disconnection of power supply without further notice.

To ease the burden, TNPDCL has permitted payment of the additional security deposit in three instalments aligned with the billing cycle on request.

How additional security deposit will be calculated

Security deposit will be calculated based on electricity charges during the previous 12 months

· Monthly billed consumers: Security deposit = 2 × monthly average electricity charges

· Bi-monthly billed consumers: Security deposit = 3 × monthly average electricity charges

Existing security deposit and interest credited are adjusted against the revised requirement

The balance amount, if any, is collected as the Additional Security Deposit (ASD)

Consumers have 30 days to pay, with an option to pay in three instalments on request