Shock treatment via power bills

The Tamil Nadu Generation and Distribution Corporation (Tangedco) recently proposed a hike in the electricity tariff in the State, which has shocked citizens. The base price per unit has been revised from Rs 4.50 to Rs 2.50 per unit. However, that is offset by the fact that once a user crosses 1,000 units, the cost surges to Rs 11 per unit. This means the higher your power consumption, the steeper your power expenditure, compared to bills under the older tariff. The first 100 units continue to remain free, although the second hundred gets charged at Rs 2.25 per unit as compared to Rs 1.50 as per the old tariff. As per the new tariff, charges are hiked for every 100 units.

There are other changes too, which could compel citizens to tighten purse strings. One of them is the creation of a new tariff for common supply under the low tension category of consumers, who live in apartment complexes. Apartments dwellers will now need to cough up a premium for maintenance charges, as common supply which previously encompassed elevators, lights, and water, will now include supply for swimming pools, gyms, sewage/water treatment plants, and fire hydrant systems. The latter services were previously charged at the commercial tariff of Rs 5 per unit upto 100 units, and Rs 8.05 per unit after that. As per the new tariff, common services will be now charged at Rs 8 per unit and a fixed charge of Rs 100 per kilowatt per month.

These developments will impact middle income and lower middle income families the hardest. Several Residents Welfare Associations likened the latest tariffs to the straw that breaks the camel’s back and have in turn urged the government to reconsider the tariff. It was also pointed out how the Tamil Nadu Electricity Regulatory Commission had faltered in its judgement in its 2017 order by allowing the collection of commercial charges for common supply from multi storey residential complexes, despite power consumption being purely on account of domestic usage. Instead of remedying this, the government seems to have categorised all apartments with common service connections under the new tariff.

Also, there are proposals to levy low tension consumers with miscellaneous charges hiked to an extent of 100% — from attending faults to payments for cable and overhead infrastructure, registration, processing. The Opposition has also pointed out that the tariff hikes are being implemented at a time when there have been frequent power cuts in many parts of the State and that the DMK government’s poll promise of shifting to a monthly billing system remains unfulfilled.

But, it must be noted that the tariff is being hiked after eight years. Tangedco is anticipating a 43% increase in its revenues from the sale of power through this new tariff. The revenue expected is Rs 63,754 cr as against Rs 51,663 cr as per the existing tariff. In spite of the tariff hike, Tangedco will face a revenue deficit of Rs 16,160 cr as the revenue requirement is Rs 79,914 cr.

It is unlikely that the TN government will backtrack on the power tariff hike. This places the onus of mitigating this surge on the consumers themselves, just like they did during the fuel price hike, a period which saw unprecedented interest in electric vehicles. On the industrial front, it might be the proverbial push required for entrepreneurs to consider researching and delivering technologies that can help the ordinary citizens transition to clean tech.