The Tamil Nadu Electricity Regulatory Commission (TNERC) has brought down cross-subsidy surcharges (CSS) in the range of Rs1.6 to Rs2.5 per unit and directed the state’s power utility Tangedco to reduce power tariffs for industrial and commercial consumers. The high cross-subsidy surcharge was one of the frequent complaints of the industry and commercial establishments.
The revision follows the National Tariff Policy 2016 suggesting a new formula for determination of CSS at a maximum of 20% of the tariff. With the new CSS, industry will be able to purchase power at a lower rate compared to the present rate even from outside the grid.
Cross subsidy surcharge is levied by state discoms to recover the cost of supplying subsidised power to a section of the population. In Tamil Nadu, subsidised power is supplied to domestic consumers up to a certain slab of consumption, besides hut dwellers and farmers.
“CSS determination should not be violated by the commission at least in this tariff order. The tariff should be designed in such a way that it supports the development of industries in the state,” the TNERC said. The per-unit cost for industrial consumers was around Rs7.48 out of which CSS was Rs3.51.
“According to the load generation balance report, the state has surplus power. Thus, the power cost has to be reduced instead of Tangedco’s proposal for maintaining the tariffs at the existing level,” said the commission.
Industrialists and power experts are elated with the lowering of the CSS. “The TNERC has reduced CSS and aligned it with the National Tariff Policy 2016 and other state discom rates. TNEB will be the first entity to benefit from the lowering of CSS as it will be able to sell power, especially renewable power, to states which are in need,” TVS Capital Funds MD Gopal Srinivasan told TOI.
The commission said the base tariff of Rs6.35 per unit for industrial consumers was very high compared to tariffs for other consumers. Moreover, the CSS made it impractical for industrial consumers to buy from power exchanges or generate within the state under the captive power scheme at Rs5.25 a unit, it said.