96% jump in power revenue after back-to-back tariff hikes

CHENNAI: The Tamil Nadu Generation and Distribution Corporation Ltd (Tangedco) recorded a 96 per cent rise in revenue collection in the 2023-24 fiscal, compared to 2021-22, even as its losses came down by 61 per cent, thanks to the successive tariff hikes and loss funding by the government.

According to an Aggregate Revenue Requirement (ARR) petition for 2023-24 submitted to the TNERC, Tangedco said it earned a revenue of Rs 97,757 crore as against the expenditure of Rs 1,04,677 crore with the losses coming down to Rs 6,920 crore.

The 2023-24 is the first full financial year after the Tamil Nadu Electricity Regulatory Commission increased the power tariff on September 10, 2022, and July 1, 2023. With the steep increase in the electricity charges, the utility’s revenue requirement increased from Rs 67,978 crore in 2021-22 to Rs 1,04,677 crore in 2023-24 which is a rise of 54 per cent. The total revenue of the utility including through the sale of power increased from Rs 49,872 crore in 2021-22 to Rs 97,757 crore in 2023-24, recording a hike of 96 per cent while the losses fell by 61 per cent from Rs 18,106 crore in 2021-22 to Rs 6,920 crore in 2023-24.

According to the ARR petition, the revenue electricity tariff including high-tension has gone up to Rs 71,614 crore in 2023-24 for the sale of 93,380 million units from Rs 45,953 crore in 2021-22 for 82,002 million units. Domestic consumers have seen a sharp increase in electricity bills over the past three years. The average energy charge for domestic users has risen from Rs 3.43 per unit in 2021-22 to Rs 5.18 per unit in 2023-24, a staggering 51% increase. However, in the corresponding period, the state government subsidy for domestic consumers increased from Rs 1.14 in 2021-22 to Rs 2.15 in 2023-24. Considering the various slabs in the domestic electricity tariff, the consumers in lower slabs were highly subsidised compared to those in higher slabs paying more.

The delay in the commissioning of its ongoing thermal power projects has resulted in the increasing power purchase cost. As per the petition, the power procurement including the central generating stations and power exchanges has increased from 72,629 million units in 2021-22 to 82,906 MUs in 2023-24 registering an increase of 14 per cent but the procurement cost increased by 70 per cent in the corresponding period from Rs 32,736 crore to Rs 55,754 crore. Even the utility’s own generation cost increased by 77 per cent from Rs 14,051 crore to Rs 24,920 crore while the energy generated has risen by only 21 per cent.

"The state government should provide relief to the consumers this year considering the steep hikes made in the last three years in power tariff and miscellaneous charges," said K Kathirmathiyon, secretary, of Coimbatore Consumer Cause. “Apart from the tariff hike, the commission has increased the miscellaneous charges like availing new power connection by over 100 per cent,” he pointed out.