Electricity Tariff

Tariff revisions in Tamil Nadu:

In the case of Tamil Nadu, 7 tariff revisions were made in the last decade (1991-2000). However in this decade (2001-10) only 3 revisions have been made. Then there was one in 2012 and the latest revision was made on 20-06-2013. Based on the @012 Tariff revisions, Tamil Nadu’s tariff rates have increased slowly. However, the Agricultural sector has stayed constant at 0.04 paise/KWh.  This is in sharp contrast with the All India framework, where agriculture tariffs have been revised upwards.

• Tamil Nadu has been charging its residential customers at least 90paise/KWh lower than the National Average.

• The situation is reversed in the case of commercial users where Tamil Nadu charges its customers at least 80paise/KWh higher than the national average. 

• The national average agricultural tariff is rising by 30 paise/KWh while Tamil Nadu's tariff remains nearly nil.

• Like commercial consumers, industrial consumers are also worse off in Tamil Nadu than a majority of other states in India with respect to electricity charges. The Tamil Nadu tariff is at least 15Paise/KWh higher than the national average.

Most State Electricity Boards do not recover the average cost of power supply as they keep their tariffs low and therefore are struggling under huge debts. The Tamil Nadu losses are Rs. 50, 000 crores. The Financial Restructuring Plan (FRP) is proposed by the Government of India, it is debt restructuring package for the State Electricity Boards in order to bring the ailing State distribution companies out of their predicament.  However, in order to avail themselves of this package, the State governments and the SEBs have to mandatorily revise their tariffs regularly to reflect the true cost of supply and to make the units more viable. Tamil Nadu has also been called out as a focus state apart from Rajasthan, Haryana and Uttar Pradesh and a separate arrangement will be worked out with these states for financing operational losses. 


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