Tamil Nadu Implements Tariff Subsidies And 50% Rooftop Network Reduction For MSMEs

The Tamil Nadu Electricity Regulatory Commission (TNERC) has taken significant steps to support industries and consumers in the electricity sector. These measures include the reduction of tariff rates for certain categories of multi-tenement consumers and the waiving of peak hour charges for specific industries until the installation of smart meters by the Tamil Nadu Generation and Distribution Corporation Ltd. (TANGEDCO). Additionally, there has been a reduction in solar rooftop network charges by 50% for Micro, Small, and Medium Enterprises (MSME) industries.

The decision to lower the tariff rate for multi-tenement consumers was announced in a letter dated 30-10-2023, where the government directed a reduction from ₹8.15/unit to ₹5.50/unit for common supply in multi-tenements without lift facilities, having ten or fewer residents and three floors or fewer, for common lighting and water supply. Subsequently, the regulatory commission issued an order on 31-10-2023, implementing the tariff reduction from 01-11-2023 to 31-03-2024.

In another move, the government announced the non-collection of peak hour charges from LT-IIIB Industries until the installation of smart meters by TANGEDCO. Furthermore, solar rooftop network charges for MSME industries were reduced by 50%. TANGEDCO, in response to these decisions, requested a subsidy of ₹196.10 Crore to compensate for the revenue shortfall due to the non-collection of peak hour charges and the reduction of solar rooftop network charges.

In a subsequent letter, the Energy Department of the Government of Tamil Nadu issued a policy direction under section 108 of the Electricity Act, 2003, committing to provide compensation for the mentioned reductions. The regulatory commission, acknowledging the government’s directive, accepted it in a letter dated 11-11-2023.

Following this, TANGEDCO submitted a request to the commission for the issuance of a provisional tariff subsidy order to compensate for the revenue shortfall. The requested subsidy of ₹92.03 Crores is attributed to the reduction in tariff rates for multi-tenement consumers, non-collection of peak hour charges from LT-IIIB Industries, and the reduction of solar rooftop network charges for the period from 01-11-2023 to 31-03-2024.

Considering the potential revenue shortfall of ₹92.03 Crores during this period, the commission approved the provisional subsidy. However, it is important to note that this subsidy is provisional and will be reconciled based on actual consumption and revenue assessed quarterly. TANGEDCO is required to furnish a report within 60 days, detailing the reconciliation of the approved subsidy with the actuals. In conclusion, these initiatives by the TNERC and TANGEDCO aim to provide financial relief to consumers and industries while ensuring a smooth transition to smart meters and promoting the use of solar energy among MSME industries. The provisional subsidy, subject to reconciliation, reflects a proactive approach to addressing the economic challenges faced by various sectors in the electricity landscape.

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