Interest on Security Deposit for the Financial year 2026-27 of HT and LT consumers – EQ

Summary:

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## Key Business & Financial Details

| Parameter | Detail |
|———–|——–|
| **Order Number** | 3 of 2026 |
| **Order Date** | 06 April 2026 |
| **Applicable For** | Financial Year 2026-27 |
| **Consumer Categories Covered** | HT (High Tension) & LT (Low Tension) consumers |
| **Interest Rate on Security Deposit** | 5.76% per annum |
| **Interest Rate on Meter Caution Deposit** | 5.76% per annum |
| **Basis of Interest** | Weighted Average Bank Rate (April 2025 – March 2026) |
| **Legal Authority** | Section 47(4) of Electricity Act, 2003 & Tamil Nadu Electricity Supply Code Regulation 5(5) |

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## Legal & Regulatory Basis

– **Section 47(4) of the Electricity Act, 2003** mandates that distribution licensees shall pay interest on consumer security deposits at a rate **equal to or greater than the bank rate**, as specified by the State Commission.
– **Regulation 5(5)(i) & (iii)** of the Tamil Nadu Electricity Supply Code empowers the Commission to specify the interest rate and requires it to be credited to consumers’ security deposit accounts.

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## Operational Directives for TNPpCL

| Action Item | Deadline |
|————-|———-|
| Credit interest (5.76% p.a.) to each consumer’s Security Deposit & Meter Caution Deposit account for FY 2026-27 | By 31 March 2027 (implied) |
| Intimate consumers of their total available credit (including interest) as on 31 March 2026 | On or before **30 June 2026** |
| Submit compliance report to the Commission | On or before **31 July 2026** |

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## Business Implications for Consumers

### ✅ **For HT & LT Commercial / Industrial Consumers:**
– Your **security deposit** with the electricity board will now earn **5.76% interest** for FY 2026-27.
– This interest is **not paid out in cash** but **credited to your security deposit account**.
– It increases your total deposit balance, which may reduce future deposit top-up demands if your consumption increases.

### ✅ **For Residential Consumers (if applicable):**
– Though the order mentions HT & LT consumers, in practice, LT includes residential. However, interest on security deposit for domestic consumers is often not calculated due to small amounts. Check your bill or login to TNPpCL portal.

### ⚠️ **Important Notes:**
– Interest is **compounded annually** and credited only at year-end.
– The deposit (including interest) is **refundable only when you disconnect supply** or close the connection.
– You will receive an **intimation** of your deposit balance with interest by **30 June 2026** – review it for accuracy.

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## Strategic Business Recommendations

1. **For Large Power Consumers (HT/Industrial):**
– Verify the security deposit amount held by TNPpCL against your sanctioned load.
– Ensure the interest credited (5.76% p.a.) is correctly calculated and reflected in your annual deposit statement.
– If excess deposit exists (common after load reduction), request refund/adjustment.

2. **For LT Commercial Establishments:**
– Compare this 5.76% interest rate with your cost of capital. If you have surplus cash, paying a higher security deposit voluntarily is **not advisable** – you will earn only 5.76%, which may be below your business return on capital.

3. **For Financial & Compliance Teams:**
– Track the 31 July 2026 compliance report submission by TNPpCL.
– If intimation is not received by 30 June 2026, file a grievance with the Consumer Grievance Redressal Forum.

4. **For New Connections:**
– While paying initial security deposit, note that it will earn this interest rate from the first full financial year onward.

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