Tariff hike expected to generate Rs 20,700 cr additional revenue

CHENNAI: Tamil Nadu Generation and Distribution Corporation expect a 43% increase in revenue from the sale of power through the proposed tariff after a gap of eight years.

According to the tariff petition filed with the Tamil Nadu Electricity Regulatory Commission, with the proposed tariff hike, the utility is hoping to generate a revenue of Rs 68,794 crore through the sale of 83,807 million units to the consumers in 2022-23 as against Rs 48,063 crore in the existing tariff.

Despite the hike in the tariff, Tangedco has predicted a revenue deficit to the tune of Rs 16,158 crore with a revenue requirement of Rs 79,914 crore.

As per the Tangedco estimate for 2021-22, it suffered a loss of Rs 1.94 for every unit sold to consumers in 2021-22 with the average cost of supply (ACS) stood at Rs 8.90 per unit while the average rate of realisation (ARR) was Rs 6.96 per unit.

With the proposed tariff hike, the Tangedco hopes to narrow down the gap between ACS and ARR. It has estimated the ACS at Rs 9.54 per unit for 2022-23 while ARR is likely to be Rs 8.2 per unit.

Finance Minister Palanivel Thiaga Rajan, while releasing the white paper on State finance last year, lamented that Tangedco recovers Rs 2.23 per unit from domestic consumers on an average as against the total cost of supply of Rs 9.06 per unit leaving a large under-recovery of Rs 5.74 per unit.

Tangedco seems to have taken serious note of his advice with the proposed tariff hike it expects to recover Rs 5.95 per unit from the domestic consumer as against the ACS of Rs 9.54 per unit.