Subsidised power to Puducherry at Tamil Nadu consumers' expense?

Is the Tamil Nadu Electricity Board (TNEB) subsidising power consumers of Puducherry at the expense of power consumers of Tamil Nadu?

That is how the Tamil Nadu Electricity Regulatory Commission (TNERC) has viewed the present supply arrangement to the Union Territory of Puducherry.

In its tariff order, the Commission has stated that “in the absence of firm sale contract between the TNEB and the government of Puducherry and with the ever increasing sale of electricity to Puducherry by the TNEB, a situation is being created which has resulted in the TNEB subsidising the electricity consumers of Puducherry at the expense of electricity consumers of Tamil Nadu.”

Pointing out that the Board is facing an acute shortage of power, the TNERC has mentioned that the TNEB has been purchasing power in the open market in the range of Rs. 5 to 7 per unit whereas the sale to Puducherry is at the rate of Rs.1.94 per unit. “[The] TNEB needs to protect the electricity consumers of Tamil Nadu,” the Commission has stated.

Quoting the tariff order issued in February this year by the Joint Electricity Regulatory Commission for Goa and Union Territories on annual revenue requirement and retail tariff for the Electricity Department of Puducherry (EDP) for 2009-2010, the TNERC's order has stated that in respect of power purchase from the Board, the cost of supply was worked out on the basis of the rate paid by the TNEB to the Neyveli Lignite Corporation (NLC) coupled with wheeling charges. At the time of power tariff revision in December 2001, the EDP was treated like a high-tension consumer and the tariff was fixed at Rs. 3 per unit.

When Puducherry moved the TNERC against this move, the Commission had concluded that the sale of power between the EDP and the TNEB was in the nature of interstate sale of power and the EDP could not be regarded as a HT consumer. It had ordered to maintain status quo. When the EDP approached the Madras High Court against this order, the High Court had granted stay and directed the continuance of the original payment arrangement.

The main issue was yet to be decided, the TNERC tariff order added, citing the Joint Electricity Regulatory Commission's order.

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