Letter Ms. No. 100 Energy(A1) Department, dated 07-06-2004.

From

Thiru N.S. Palaniappan, I.A.S.,
Secretary (I/C)

To

The Chairman,

Tamil Nadu Electricity Regulatory Commission,

Vedha Mansion, 17, Third Main Road

Seethammal Colony, Alwarpet, Chennai 600 018.

Sir,

Sub:- ELECTRICITY - Reduction of Tariff for Domestic Consumers and extension of free supply of Electricity to Agricultural and Hut Consumers - Issue of direction - Reg.

Ref:- Government Letter No. 5749/A1/2004-1 dated 3-6-2004 addressed to Chairman/TNEB with copy to Chairman/TNERC.

* * *

I am directed to state that the Government have decided that the agricultural and Hut consumes will be provided free supply of electricity. Similarly, the Government have also decided to reduce the electricity tariff for domestic consumers as detailed below;

Note: (1) For any consumption the tariff is applied on a stepped basis (i.e.) for the first 25 units at the rate specified in the above table, for the next 25 units at the rate specified in the above table and so on till the actual consumption level is reached. Thus, the stepped tariff benefits all the consumers.

2) For those consuming upto and including 50 units per month or 100 units bi-monthly, the tariff will be Rs. 0.65 for the consumption bracket 0 to 25 units per month and Rs. 0.75 for the consumption bracket 26 - 50 units.

3) The free supply of electricity to agricultural and hut consumers will come into force from 1-4-2004 and the reduced tariff rate to domestic consumers will come into force from 16-6-2004. The Government will compensate the Tamil Nadu Electricity Board for the shortfall in revenue, on account of implementation of the policy. The Agricultural consumers under self-financing scheme will continue to pay the tariff rate fixed by the Tamil Nadu Electricity Regulatory Commission to The Tamil Nadu Electricity Board.

2. In order to effectively implement the free supply of electricity to agricultural and hut consumers and the reduced tariff rate to domestic consumers and to comply with the provisions of the Electricity Act, 2003, the Chairman Tamil Nadu Electricity Board has requested the Government to issue a policy directive to the Tamil Nadu Electricity Regularity Commission under Section 108 (1) of the Electricity Act, 2003 and to compensate the Tamil Nadu Electricity Board for the shortfall in revenue on account of this directive as per the provisions of section 65 of the Electricity Act 2003.

3. The Government accordingly issue the policy directive to the Tamil Nadu Electricity Regulatory Commission, under Section 108 (1) of the Electricity Act, 2003 that free supply of electricity shall be extended to Agricultural consumers (except self financing scheme farmers) and hut consumers from 1-4-2004 and the following electricity tariff shall be charged to the domestic consumers from 16-6-2004;

Note: (1) For any consumption the tariff is applied on a stepped basis (i.e.) for the first 25 units at the rate specified in the above table, for the next 25 units at the rate specified in the above table and so on till the actual consumption level is reached. Thus, the stepped tariff benefits all the consumers.

(2) For those consuming upto and including 50 units per month or 100 units bi-monthly, the tariff will be Rs. 0.65 for the consumption bracket 0 to 25 units per month and Rs. 0.75 for the consumption bracket 26 - 50 units.

4. The Government also issue the above directive in the interest of public of the state of Tamil Nadu.

5. The Government of Tamil Nadu will provide the following subsidy direct to the Tamil Nadu Electricity Board in advance as per section 65 of the Electricity Act, 2003 so as to implement the reduced rates for domestic consumers from 16-6-2004 and to extend free supply of electricity to Agricultural (excluding Self Financing Scheme farmers) and Hut consumers from 1-4-2004.

(i) Rs. 910 Crores for a full year towards subsidy for reduced tariff rates for Domestic category. The subsidy shall be in monthly instalments.

(ii) Rs. 196.04 Crores for a full year towards subsidy for extension of free supply to Agriculture (excluding Self Financing Scheme farmers) payable half-yearly and Rs. 16.91 crores for a full year towards subsidy for extension of frees supply to Hut consumers payable half-yearly.

6. The Chairman Tamil Nadu Electricity Regulatory Commission is requested to take necessary follow up action, accordingly.

7. This letter issues with the concurrence of Finance Dept. vide its U.O. No. 1648/FS/P/04 -1 dated 4.6. 2004.

Yours faithfully,

for Secretary to Government

Copy to:

The Chairman, Tamil Nadu Electricity Board, Chennai-2.

The Finance Department, Chennai -9.

The Chief Minister's Office, Chennai-9.

Sr. P.A to Minister (Law, Information Technology & Electricity) Chennai -9.

Sr. P.A. to Minister ( Finance and Food) Chennai -9.

Energy (A, C, and D Section ) Dept. Chennai -9.
SF/SCs.