TNERC directs TANGEDCO to stop collecting higher development charges from consumers applying for new connections

CHENNAI: After the consumer complaints over collection of higher development charges applicable to underground cables (UG) in places with overhead cables (OH), Tamil Nadu Electricity Regulatory Commission (TNERC) has directed the Tamil Nadu Generation and Distribution Corporation to immediately stop collection of higher charges and refund the same to the consumer's account to be adjusted with their subsequent bills.

“The application software should be corrected accordingly with immediate effect and no further collection of development charges is permitted with existing arrangements. The extra development charges collected so far by way of wrong applicability of the UG development charges of the OH service connections should be refunded to the applicants or consumers immediately or treated as advance consumption charges and reported to the commission,” the commission said in a letter to the TANGEDCO CMD on a petition filed by the Coimbatore Consumer Cause.

The issue pertaining to consumers applying for new electricity connections in the municipal corporations limits across the state including Chennai, Coimbatore Madurai and Trichy were on default asked to pay development charges applicable for the UG even in places with only OH lines.

The development charges payable for a three phase domestic connection is Rs 5110 per kilowatt which is 2.5 times more than OH connection charges of Rs 2040 per kW.

For a single phase connection, the development charges payable is Rs 2,860 per connection for OH while it is Rs 7155 per connection for UG cables.

This is how the fleecing is happening

Suppose a consumer applies for a new domestic connection with a five-kW load. This consumer has to pay an overall charge, including a developmental charge of Rs 18,647 for overhead cable. However, the consumer is asked to pay Rs 33,972 for the underground cables even if his/her locality has only OHT lines.

When the consumers questioned the collection of higher charges, TANGEDCO officials blamed a software glitch and asked them to pay the same amount to get the new connection.

TNERC has clarified that the collection of higher charges more than the tariff authorised under the Non-tariff related miscellaneous charges order dated June 30, 2023 shall be stopped immediately. “Only when the work of LT extension from the DT to the premises of the applicant is involved with UG cables, the development charges under UG cable is payable. Such systems where the LT networks (to which the applicant is connected) are established with UG cable are predominantly in service only in the Chennai area. In places like Salem. Erode, Coimbatore. Trichy. Madural, Tirunelveli etc, where the HT feeders are laid with UG cable. However, the majority of the LT network of those feeders still remain in the OH system only. In such a case, only the development charges for OH are applicable,” it said.

The commission further said that the consumer laying service connection either with the OH service connection wire or with UG service connection cable in their premises is not the criteria to decide the applicability of development charges, as it is carried out at the expenses of consumer and will be maintained by the consumer as per sub-regulation 29(17) of the Distribution Code, as amended. “Therefore when the LT lines are OH and the consumer service connection is UG, tapped from existing poles, only the development charges of OH are applicable. Only when the service cable is tapped from the pillar box of the UG cable system, the development charges for UG are applicable,” it clarified.

TNERC said that a development charge is approved instead of estimate cost towards extension of supply to the consumer. “If the extension of distribution main involves OH, only the development charges of OH to be collected. If the extension of distribution main involves UG, then development charges of UG to be collected. If it is mixed, development charges to be collected proportionately,” it noted.