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CHENNAI, March 15

THERE will not be free supply of power to any consumer in Tamil Nadu hereafter.

About 15 lakh farmers and 14 lakh hut dwellers in the State were enjoying free power supply till now.

Besides this significant ruling, the Tamil Nadu Electricity Regulatory Commission, which passed its first order today on a tariff revision petition filed by the electricity board, hiked tariffs for all sections of consumers, with domestic connections and commercial consumers facing the largest quantum of increase.

The hike ranges between 22.12 per cent for domestic connections and 7.13 per cent for cottage and tiny industries.

In a bid to soften the blow and deflect criticism, the State Government has announced a direct subsidy scheme under which it will pay small and marginal farmers - about 9.4 lakh of them - Rs 1,000 a year each in two equal instalments, for them to pay for the power they consume. Small and marginal farmers have pumpsets from 3 HP to 5 HP.

The TNERC's tariff order takes effect from March 16. The tariff increase is expected to net the Tamil Nadu Electricity Board Rs 1,398.80 crore, whereas the TNEB's proposal would have brought it Rs 2,110.03 crore.

For agricultural connections, the commission has said that they will have a six-month billing cycle with the first payment due in September. Farmers have the option to either pay Rs 250 per HP per year or 20 paise per unit if the connection is metered. TNEB had proposed Rs 600 per HP per annum or 50 paise per unit. This brings to an end a 12-year run of free power supply for agricultural operations.

Thanks to the Government's announcement, a small farmer with a 3 HP pumpset will pay Rs 750 per year and have Rs 250 left from the subsidy. The hut dwellers will receive Rs 100 per year as support against the estimated power charge of Rs 90 on metered basis. The Tamil Nadu Electricity Board (TNEB) connects over 14 lakh huts in rural areas.

Official sources point out that this is a direct subsidy to the consumers rather than compensating the electricity board. The expense on account of this, which will be provided for in the budget, comes to about Rs 94 crore for farmers and another Rs 15 crore for hut dwellers, which is much lower than the tariff compensation of about Rs 250 crore that the Government had provided for this year.

TNERC has also toned down TNEB's annual net revenue requirement thereby envisaging a nil deficit for 2003-04 against TNEB's estimated deficit of Rs 633 crore. The total cost as estimated by TNEB was Rs 13,526 crore but the commission has approved Rs 11,899 crore. TNEB's estimate of net revenue requirement was Rs 13,287 crore against Rs 11,921 crore approved by the commission.

The commission has made significant reductions in power purchase cost and permitted Rs 5,648 crore against Rs 6,557 crore proposed by TNEB. The savings are to come from merit order dispatch system to be adopted in power purchase. Under this system, the board will purchase the lowest cost power on a priority basis. Interest and finance charges have been contained at Rs 672 crore against TNEB's estimate of Rs 922 crore, with the commission not allowing some borrowings proposed by the electricity board.

The Commission Secretary, Mr R. Balasubramanian, who released the order to the media today, said that the order rationalises the number of slabs, does away with the differential tariff for Chennai Metropolitan area and non-metro areas, the tariff for information technology companies has been merged with industrial service with the lighting load ceiling on industries brought on par with information technology companies, powerloom ancillary industries have been brought under the powerloom category and there is no hike in tariff for them, alternative two part tariff is withdrawn and brought under the regular tariff in that category and extra charges for welding sets brought down to 15 per cent from 25 per cent.

The low-tension services with a connected load of 25 HP and above should maintain a power factor of not less than 0.85 lag. When the power factor drops below this limit, one per cent of the current consumption charge will be collected for every drop of 0.01 per cent up to 0.75 and 1.5 per cent of current consumption charge if power factor drops below 0.75. The 1.5 per cent charge will calculated for every reduction of 0.01 below 0.85. The order provides for incentives for efficiency with a high power factor rebate of 0.5 per cent of the amount of current consumption charges for every increase of 0.01 power factor above 0.90. The high tension services will get a power factor rebate of 0.5 per cent of the current consumption charge for every 0.01 increase over 0.95. In the case of two part tariffs for HT consumers, maximum demand charges for any month will be levied on the kVA demand actually recorded in that month or 90 per cent of the sanctioned demand, whichever is higher.

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