Tamil Nadu residents are set to experience a hike in electricity tariffs as the state’s power distribution company, Tamil Nadu Generation and Distribution Corporation (TANGEDCO), responds to escalating financial challenges.
According to reports from ANI citing a TANGEDCO press statement, the electricity tariff has been increased by 2.18% effective from July 1, as per the multi-year tariff order sanctioned by the Tamil Nadu Electricity Regulatory Commission (TNERC). The decision to adjust tariffs, which considers consumer price index numbers, aims to mitigate financial losses while safeguarding consumer welfare. Notably, the 2.18% increment applies specifically to households and is fully covered by the government’s electricity subsidy, ensuring minimal direct impact on consumers. TANGEDCO attributed its financial predicament to substantial losses accumulated over the past decade. From Rs18,954 crore in FY12, the total financial deficit has surged to Rs94,312 crore by FY22, necessitating the discom to seek significant loans from financial institutions and banks. This fiscal burden has intensified, with outstanding loans ballooning from Rs43,493 crore in FY12 to Rs1,59,823 crore in FY22, accompanied by a staggering 259% rise in net interest payments.
In adherence to guidelines set by the Union Ministry of Power, annual adjustments in electricity tariffs have become imperative for accessing central government funding under schemes like the Strengthening of Distribution System (RDSS). Despite criticisms from opposition leaders such as AIADMK’s Edappadi Palaniswami and BJP’s Annamalai, the state government defends these incremental tariff revisions as necessary measures to sustain operational stability and service continuity. The incremental tariff adjustments, while controversial, are framed as crucial for TANGEDCO’s financial viability amidst mounting operational costs and loan obligations. The ongoing discourse underscores the delicate balance between fiscal responsibility and consumer affordability in the realm of public utilities. As Tamil Nadu grapples with economic recovery and fiscal consolidation, the impact of these tariff adjustments on consumer sentiment and economic dynamics remains a focal point of public and political scrutiny. The state’s approach to managing energy costs will continue to shape its economic policy landscape, influencing broader implications for governance and public service delivery in the foreseeable future.
