TNERC for higher subsidy to TNEB

The Tamil Nadu Electricity Regulatory Commission (TNERC) has called for higher subsidy from the government to the Tamil Nadu Electricity Board (TNEB) towards agricultural consumption.

In its latest tariff order, the Commission stated that during 2009-2010, realisation from the agricultural sector should have been Rs.5,828 crore against which the subsidy received from the government was Rs.267 crore. [In its order in March 2010 on the tariff subsidy provision, the Commission approved a similar amount for the current financial year too.] The figure of Rs.5,828 crore was worked out on the basis that the farm sector is said to have consumed 11,918 million units (MU) of energy at an average cost of supply of Rs.4.89 per unit.

According to the TNEB's publication – ‘Statistics at a glance 2008-2009,' there were 18.7 lakh farm connections as on March 31, 2009.

Describing as “gross underestimation,” the total capacity of 1.07 crores horsepower (HP) farm connections indicated by the Board, the Commission said: “Suffice to say that the subsidy towards agricultural consumption determined on the basis of the capacity indicated by the TNEB is vastly inadequate to cover the actual expenditure incurred by the TNEB.

“The gap between the expenditure incurred by the TNEB and the subsidy paid by the government is vastly responsible for the poor financial health of the TNEB. This is a matter which the government and the TNEB should sort out for restoring the financial health of the TNEB.” The order said that in the absence of metering of agricultural consumption, it was not possible to determine the consumption in each service connection.

The TNERC pointed out that the Government of Andhra Pradesh offered a subsidy of Rs.2,146 crore for the agricultural sector during 2009-10 against the total subsidy of Rs.3,486 crore paid to distribution utilities. For the year 2010-2011, the overall subsidy commitment of the Andhra Pradesh government was Rs.3,652 crore. “Andhra Pradesh and Tamil Nadu are identically placed with regard to the demand for power and energy, consumer mix etc.”