The Tamil Nadu Generation and Distribution Corporation (Tangedco) will shell out a subsidy of ₹7,724 crore for 2017-18 for free supply and at reduced tariff of electricity to various segments of consumers.

The Tamil Nadu Electricity Regulatory Commission has cleared the tariff subsidy and directed the State government to pay the subsidy in advance to the utility. The order is available on the TNERC website.

Budget provision

The State government has made a budgetary provision of ₹8,538 crore for 2017-18 as tariff subsidy to Tangedco. The largest outgo of subsidy is for domestic consumers (₹3,687 crore). Over 1.9 crore domestic connections get 100 units of electricity free in a bimonthly cycle apart from concessional tariff from May 23, 2016.

The 100 units of free power to all the domestic consumers as added about ₹1,600 crore to the subsidy element in 2016-17 and 2017-18, according to reliable sources.

The number of consumers is growing by a fraction of a percentage at 0.11 per cent a year but their power consumption is increasing at 7 per cent.

Agriculture consumers are the second largest segment to get free supply. The subsidy outgo to the government is ₹3,431 crore including free supply to the normal category and the self financed scheme. Under the normal category in agriculture supply the subsidy for free electricity is ₹2,677 crore as compared with ₹2,618 crore (provisional estimates) in 2016-17.

The total connected load is 93.12 lakh HP. Under the Self-financing Scheme, the subsidy is ₹754 crore to 26.23 lakh HP of connected load. Handloom weavers get 200 units of electricity free bimonthly and powerloom weavers 750 units free from May 23, 2016.