The Tamil Nadu Electricity Regulatory Commission (TNERC) has issued a new tariff order for the fiscal year 2024-25, which was set to take effect from July 1, 2024. This order, which was a suo-motu decision, aims to adjust the tariffs for the distribution of electricity in the state. The order has been passed by the TNERC.
The tariff determination process has its roots in the Tamil Nadu Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulations, 2005. These regulations provide a framework for setting tariffs that reflect the cost of supplying electricity, aim to reduce cross-subsidies, safeguard consumer interests, and ensure reasonable recovery of electricity costs. The current order follows the methodology specified in the previous tariff order issued in 2022, which introduced a Consumer Price Inflation (CPI) linked tariff revision.
The TNERC’s approach to tariff setting is guided by several principles, including ensuring the financial viability of the electricity sector, promoting competition and efficiency, encouraging the economical use of resources, and ensuring the quality of supply. The Commission aims to provide electricity to consumers at reasonable and competitive rates while also attracting investments and maintaining transparency and predictability in regulatory approaches.
The tariff order outlines specific changes in the rates for both high-tension (HT) and low-tension (LT) supply consumers. The new rates are designed to reflect current economic conditions, including the rate of inflation, and to ensure that the costs incurred by the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for the distribution wire business are adequately covered. Additionally, the order specifies other charges such as wheeling charges, network charges, and cross-subsidy surcharges, which apply to different categories of consumers.
The process leading to this tariff revision involved public notices, consultations with the State Advisory Committee, and public hearings. These procedures were part of the broader proceedings undertaken in 2022, which included a thorough review of TANGEDCO’s filings and consideration of stakeholder inputs. Given that the current order is an implementation of the CPI-linked tariff revision approved in the previous order, it was issued without additional public hearings.
This tariff order will remain in effect until a new order is issued. TANGEDCO is required to pay relevant tariff determination fees as per the TNERC Fees and Fines Regulations, 2022, before June 1 of each remaining year in the current control period. The tariff order also takes into account the enforcement of the Model Code of Conduct (MCC) due to the Bye-Election 2024 at Vikravandi Constituency, delaying its issuance until the MCC was lifted.
The TNERC’s latest tariff order aims to balance the need for financial viability in the electricity sector to provide affordable and reliable electricity to consumers. By linking tariff adjustments to CPI, the Commission seeks to ensure that tariffs remain fair and reflective of current economic conditions, thereby supporting the sustainable development of Tamil Nadu’s electricity infrastructure.
Please view the document here for more details.
Discover more from SolarQuarter
Subscribe to get the latest posts sent to your email.
 has issued a new distribution tariff order for 2024, adjusting electricity rates to reflect current economic conditions and ensure fair pricing for consumers, effective from July 1, 2024.){kind=link}