The multi-year tariff order resulted in a significant hike across all consumer categories, with the increase ranging from 6 to 18 percent.
Published Aug 02, 2024 | 9:00 AM ⚊ Updated Aug 02, 2024 | 12:06 PM
Representative image (Wikimedia Commons)
“It’s a question of luxury versus minimum or basic needs for a living. There is a fine line between both,” said Ramamurthy, a construction worker.
While people using less than 100 units of electricity in Tamil Nadu are unaffected by the recent hikes in tariff, people who use more than that struggle to afford the new rates. This includes several sects of the population from middle-income households to commercial properties.
The recent hike, effective from 1 July this year, includes higher charges for domestic, commercial, and industrial consumers. According to the revised tariff, the increase for domestic consumers is between ₹5 and ₹40 for different categories.
The hike was announced on 15 July and was part of the measures to offset the mounting financial losses incurred over the years, the state-run discom TANGEDCO said.
The Tamil Nadu Electricity Regulatory Commission (TNERC) mandated annual electricity tariff revisions to stabilise TANGEDCO’s financial health and to manage inflation, starting with a multi-year tariff order issued in September 2022.
While the increased charges have raised concerns among common citizens and drawn criticism from the Opposition, this Correspondent spoke to people from various walks of life in the state to understand how the hike affects them and whether they can afford it.
Talking about what the hike means to her, Chitra, a daily wage worker told South First, “I go out early in the morning and reach home only at night, I do not use up electricity much. It hardly comes up to 60 or 70 units. However, it would be nice not to constantly monitor how much I use in the minimal time I spend at home to rest.”
The multi-year tariff order announced two years ago resulted in a significant hike across all consumer categories, with the increase ranging from 6 percent to 18 percent, reflecting the commission’s need to address financial and operational needs.
Nearly a year later, in July 2023, TNERC implemented another round of tariff adjustments, primarily driven by the requirements of the Revamped Distribution Sector Scheme (RDSS).
What people in Tamil Nadu pay for electricity
This scheme aims to improve the operational efficiencies and financial health of the distribution sector. As part of these adjustments, wheeling charges for HT consumers were increased to ₹1 per kWh. Additionally, the cross-subsidy surcharge, which helps balance the cost differences between consumer categories, was set at ₹1.86 per kWh for industrial consumers and ₹2.41 per kWh for commercial consumers. These changes reflected a modest overall increase, aligning with the broader goals of RDSS.
This year, on 15 July, TNERC introduced yet another annual tariff revision, with an overall increase of 4.83 percent across all consumer categories. This revision included a slight rise in wheeling charges for HT consumers, which reached ₹1.04 per kWh.
The cross-subsidy surcharge for industrial consumers was adjusted to ₹1.92 per kWh, while for commercial consumers, it was set at ₹2.49 per kWh.
Illaiya Nadesan, an IT professional, told South First that he approximately pays ₹6500 rupees every month for electricity. He continued, “It is an alarmingly higher price rate for just three people in the house and for us every penny count and having to keep a constant tab on the usage of electricity is a bit of a disappointment.”
Another IT professional, Sumathi Dhinesekaran, said, “One thing I always admire about Chennai is how reasonable everything is here. I just hope that things don’t change here anymore. I used to work in Bengaluru before moving to Chennai six and a half years ago, where everything was very pricey.” She continued that since the tariff rates increased, she has consistently spent at least ₹500 more for energy than she did the previous year. Earlier, she used to pay about ₹3000, so she isn’t thrilled about the hike.
However, Ravi, a retired engineer residing in Chennai says, “The increase in tariff isn’t as significant on people who are already paying a tax rate on electricity.” He also noted that such a hike in rate has been happening consecutively for three years now.
A business owner in Chennai, Elango told South First that the increase in electricity rate have a very minimal effect, but it also depends on how much a household has to pay.
Kumari, a tenant from Sathyanagar pays approximately around ₹320 per month. But like most people living in rented houses in Chennai, she doesn’t get to pay how much an unit actually costs.
Instead, the house owners end up having a single meter for the houses they own adjacent to each other and there is a fixed rate per unit that all tenants like Kumari has to pay.
A physically challenged person, Kumari receives ₹1000 as pension from the state government that is supposed to help her manage expenses. But it proves difficult and she explained that this double standards in how much she has to pay per unit only adds to her burden. For now, her relatives help her with money for electricity and other miscellaneous expenses.
In September 2022, TNERC approved a new tariff structure with annual increases of up to 6 percent from 1 July 2023, to 2026, based on inflation. The revised rates were:
Up to 400 units: ₹4.50 per unit
401 to 500 units: ₹6.00 per unit
501 to 600 units: ₹8.00 per unit
601 to 800 units: ₹9.00 per unit
801 to 1,000 units: ₹10.00 per unit
Above 1,000 units: ₹11.00 per unit
In January 2024, a mid-year review by TANGEDCO implemented another hike, adjusting rates slightly upwards to match inflation and operational costs.
Rate of electricity as of now is:
Up to 400 units: ₹4.50 per unit
401 to 500 units: ₹6.00 per unit
501 to 600 units: ₹8.00 per unit
601 to 800 units: ₹9.00 per unit
801 to 1,000 units: ₹10.00 per unit
Above 1,000 units: ₹11.00 per unit
(Edited by Neena)
(South First is now on WhatsApp and Telegram)
