Chennai is set for another cycle of annual power tariff revisions beginning in 2027, as the Tamil Nadu Electricity Regulatory Commission (TNERC) has prepared draft regulations for a multi-year tariff framework spanning five years. This could lead to yearly increases in consumption and fixed charges across all consumer categories until 2031.
Background of Multi-Year Tariff
The multi-year tariff formula was introduced in 2022, with the fifth and final revision under the current cycle due in July 2025. Over the past four years, tariffs were revised based on the consumer price index. The Tamil Nadu Power Distribution Corporation (TNPDCL) may follow the same pattern or suggest a different method to meet its required revenue.
New Tariff Cycle Details
According to a TNPDCL official, the new five-year tariff cycle starting in 2021 will see revised tariffs come into force from April 2027. The draft regulations require TNPDCL to file its petition for the multi-year tariff formula before TNERC by November 2025. The tariff revision should be adopted within 120 days after receiving feedback from stakeholders.
Government Subsidies and Consumer Impact
Though tariffs were revised annually for the last four years, the state government absorbed the spike in consumption charges for domestic consumers and a few other categories twice to shield them from additional burden. This increased the subsidy burden on the state government to Rs 17,000 crore. The latest announcement by Chief Minister C Joseph Vijay to extend free power up to 200 units to eligible consumers has further raised the subsidy quantum to Rs 19,000 crore.
Regulatory Powers and Next Steps
Officials confirmed that work is underway to prepare the petition. However, the regulations empower the regulatory body to revise tariffs suo motu even if TNPDCL fails to formally file a petition for tariff revision.
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About the Author
Venkadesan S is a Special Correspondent who primarily covers electricity, aviation, the information commission, central investigation agencies, and metro rail.
