The Tamil Nadu Electricity Regulatory Commission (TNERC) released draft Multi-Year Tariff (MYT) regulations on May 13, 2026. These regulations apply to distribution licensees (DISCOMs) and establish the framework for the financial years (FY) 2027-28 through 2031-32.
Technical and Financial Provisions
The Commission, comprising Chairman Thiru R. Manivannan, Member Thiru K. Venkatesan, and Member (Legal) Thiru B. Mohan, exercises powers under Sections 45, 46, 47, and 50 of the Electricity Act, 2003. The methodology for the re-determination of charges utilizes a Consumer Price Index (CPI) linked revision.
- Revision Formula: The Commission uses the following formula for the re-determination of charges: {Prevailing Tariff x [1+(CPI of April of respective financial year – CPI of April of previous financial year) / CPI of April of previous financial year]}.
- Escalation Methodology: The maximum allowed escalation is 6%. The escalation applied to the tariff is the minimum between CPI inflation or the 6% cap.
- Implementation Precedent: For FY 2025-26, the Commission applied an escalation rate of 3.16%. This was determined by comparing the CPI of April 2024 (186.7) and April 2025 (192.6).
- Non-tariff Miscellaneous Charges: The framework identifies categories of charges subject to Commission determination, including:
- Service Connection Charges
- Meter Rent
- Installation Testing
- Reconnection Charges (LT, LT CT, and HT)
- Changing or Shifting of Meter Boards (Order No. 9 of 2023)
- Meter Caution Deposits
- Development Charges (Overhead and Cable)
- Security Deposits
- Registration charges for application
- Earnest Money Deposit
Financial Context for Distribution Licensees
The entities governed by this framework operate under budget provisions defined for the 2025-26 period:
- Equity Infusion: The budgeted equity infusion for the Tamil Nadu Power Distribution Corporation Limited (TNPDCL) is Rs 5,000 crore for the 2025-26 Budget Estimate. This is an increase from the Rs 1,000 crore Revised Estimate of 2024-25.
- Loss Funding: The state budget includes Rs 7,700 crore for the loss funding of TANGEDCO.
- Domestic Subsidies: An allocation of Rs 7,546 crore is provided for power subsidies for domestic consumers.
- Agricultural Support: The budget provides Rs 8,126 crore for payments to the electricity board on behalf of farmers using pump sets.
Timeline and Stakeholder Participation Procedure
The procedure for finalizing the draft regulations includes public notice and the collection of views from the State Advisory Committee.
- Feedback Deadline: Stakeholders must submit feedback by May 27, 2026.
- Determinations and Effective Dates: Determinations for the current regulatory cycle, including Suo-motu Order No. 6 of 2025 and Suo-motu Order No. 7 of 2025, take effect from July 1, 2025.
- Reporting Requirements: Under Commission directives, TANTRANSCO and TNSLDC must submit quarterly reports on revenue earned from transmission, scheduling, and system operation charges.
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