CHENNAI: As the decision to increase electricity tariff by 4.83% for all users from July 1 has evoked strong criticism and reaction, the state government on Tuesday defended the decision, saying that the annual interest payment on Tamil Nadu Generation and Distribution Corporation’s (Tangedco) loans alone has increased 259% from Rs 4,588 crore in 2011-12 to Rs 16,511 crore in 2021-22.
The power utility’s total debt has tripled from Rs 43,493 crore in 2011-12 to Rs 1,59,823 crore in 10 years (till March 2022), the state government said. The annual power tariff revision is a pre-condition for availing the union government’s funds under the Revamped Distribution Sector Scheme (RDSS), the government release said.
Blaming the previous AIADMK government for the precarious position, the state government said, “Tangedco has been forced to take loans from financial institutions and banks due to lack of support (to the power utility) from the government during the AIADMK regime.” But the present Tamil Nadu government had made a commitment to accept 100% of the financial loss of Tangedco from 2021- 22. Though there has been a need to raise electricity tariff even earlier, the government, to reduce the burden on consumers, has been increasing the tariff incrementally each year.
Ponmalar Duraisamy, a small business owner in Thirumalisai near Chennai, said the tariff hike will hurt small-scale industries directly. “Several job orders are already going to north Indian states because of the high cost here. Some small units that closed during Covid have not been able to resume operations,” she said.
T Sadagopan, president, Tamil Nadu Progressive Consumer Centre, said that instead of increasing the tariff every year, the state government could drop the 100-unit free scheme and provide electricity at a reasonable rate to all. While both the state and union governments are promoting electric vehicles, the power tariff for EV charging stations has been on the rise. In 2022, Tangedco introduced a separate tariff for common facilities like EV charging stations and lifts. With the latest revision, these facilities will be charged Rs 8.55 per unit. This slab should be removed to support the government’s goal of promoting more e-vehicles, Sadagopan said.