TNEB has explained the need for tariff revision, which has not been carried out since March 2003

The recent tariff revision has caused much heartburn among several segments of consumers — domestic, industrial and educational institutions — in Chennai.

Those consuming more than 600 units in two months have to shell out Re.1 additionally for every unit they use. For these consumers, electric and electronic gadgets form an important part of their lifestyle. Calling the hike a substantial burden, the consumers feel that they have to cross-subsidise for what is being free of cost to hut-dwellers, agriculturists and other such sections of society.

According to the tariff petition filed by the Tamil Nadu Electricity Board (TNEB) with the Tamil Nadu Electricity Regulatory Commission (TNERC), those who consumed over 600 units accounted for 4,56,001 in 2008-09 and 3,47,550 in 2007-08.

M. Kannan, resident of Thoraipakkam, says the power tariff hike would have a cascading effect on all essential commodities.

S. Kabilan, Chairman, TNERC, however, defends the Commission's move and says that of all domestic consumers, this segment — 601 units and above — still enjoys the maximum subsidy of Rs.1.7 per unit. Terming this subsidy as unjustified, he notes that “this section can afford to pay as it uses a number of power-intensive electrical gadgets.”

The TNEB, in the tariff petition, has explained the need for the tariff revision, which was not carried out since March 2003. In its application, the Board pointed out that there has been a substantial increase in its operational costs on account of increase in its cost of inputs, production costs, wages and salaries to employees, whereas the tariff continues to remain the same.

The new tariff revision has touched a number of categories including cinema halls and studios, private educational institutions and industries and commercial establishments.

R. Selvaraj, president, Ambattur Industrial Estate Manufacturers Association, says the revision for industries would have an impact on the cost of production which, in turn, would increase the cost of finished goods. With many of the small-scale industries undertaking job work for which production rates have been fixed by the outsourcing companies and power being the main raw material for production, the industries would suffer losses.

A TNEB official says that the average cost of supply to high-tension consumers is Rs. 5.15 per unit, though the recovery is close to Rs. 4.47. An increase of 50 paise still falls short of the unit cost.

Private educational institutions are also upset. They say the hike has come at a time when they are already grappling with the fee structure fixed by the Private Schools Fee Determination Committee. Representatives of several schools say they are not planning to pass on the burden to the parents immediately.

A school head says that electricity charges form only a small portion of the establishment cost in the fees levied on a student. But with air-conditioned rooms, smart classrooms and other technology-friendly teaching aids increasingly becoming an integral part of a school environment, the energy consumption of the institutions is bound to increase.

The new tariff revision will improve the financial position of the TNEB. Another senior official of the Board says that by this revision, there will be a revenue collection of Rs. 1,200-1,300 crore (for eight months) for this financial year. Besides, cost-cutting measures are likely to result in the savings of about Rs. 1,200 crore.

The TNEB has drawn up a detailed investment programme for capacity augmentation, strengthening of transmission and distribution network, renovating old generating stations and other initiatives. To make the payment of energy charges consumer-friendly, the TNEB would popularise the online payment method.

The official says that online facility is now available to the residents in the city and recently, it has been extended to Coimbatore.

But, due to the participation of a limited number of banks and inadequate server capacity, the number of persons using this facility is low, even though there are around 24 lakh domestic consumers in the city.

It has been proposed to enhance the server capacity. This work is likely to be completed by September first week, the official says.

(With inputs from Liffy Thomas)

Keywords: TNEBpower tariff

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