State government to absorb the burden of the hike in electricity tariff through subsidy for domestic consumers

The Tamil Nadu Electricity Regulatory Commission (TNERC) has issued the new tariff order for the financial year 2025-26 based on the Consumer Price Inflation (CPI) index which will come into effect from Tuesday (July 1). As per the TNERC tariff order the escalation rate of the CPI has arrived at 3.16% based on the CPI index of April this year against April last year.

However, the TNERC order has stated that the State government through a letter dated June 30 has issued a policy directive to compensate for the revenue loss to Tamil Nadu Power Distribution Corporation Limited (TNPDCL) through subsidies instead of passing the burden on to various categories of consumers. 

As per the new tariff order, the energy charges have increased from 0.15 paise to 0.35 paise for domestic consumers consuming `between 400 units to more than 1,000 units bi-monthly. There is also a minor price hike for electricity consumers for cottage and micro industries, power looms, industries and information technology services, construction activities, and electric vehicle charging stations. 

According to a press release issued by Transport and Electricity Minister S.S. Sivasankaran, the State government would be bearing an additional burden of ₹519.84 crore due to the new tariff revision issued for various sets of electricity consumers. In addition bearing the hike announced for domestic consumers, the State government would be bearing the additional price hike for cottage and tiny industries, power loom consumers, and industrial consumers consuming upto 50 kilowatt (KW). A total of 2.83 crore electricity consumers are in the State.