Subsidy for power supply to domestic consumers to cross ₹10,000-crore mark

The Tamilaga Vettri Kazhagam (TVK) government’s announcement of 200 units of free power for domestic consumers using below 500 units bimonthly will further increase the State’s annual subsidy burden by nearly ₹2,000 crore.

A government order issued on Sunday by the Energy Department announced the 200-unit free electricity scheme. It also announced an additional tariff subsidy burden of ₹1,730 crore to be compensated to the Tamil Nadu Power Distribution Corporation limited (TNPDCL). With this, the annual tariff subsidy for the domestic consumers could cross ₹10,100 crore this fiscal, according to power managers.

A break-down of the ₹10,100-crore subsidy burden on account of the 2.45 crore domestic consumers would be ₹9,100 crore for those consuming up to 500 units, covering 200 free units bimonthly, and ₹1,000 crore for the 100 units of free power for those consuming more than 500 units.

According to the 2025-26 policy note of the Energy Department, the total tariff subsidy given to the electricity department was ₹15,772  crore for 2024-25. This included the subsidy for 2.45 crore domestic consumers, including those consuming more than 500 units, hutments, three-phase agricultural consumers, and power looms with 1,000 free units bimonthly.

A senior official of TNPDCL said the major part of the subsidy of ₹15,772 crore covered 100 units free for domestic consumers. This worked out to nearly ₹8,500 crore a year.

Under the electricity tariff order of 2025, the bimonthly charge for zero-400 units is ₹4.95 per unit, and the government covered the entire burden of ₹4.95 for the 2.45 crore domestic consumers. In the next slab of 101-200 units, the rate was ₹4.95 per unit. But the consumers were charged only ₹2.35. The remaining was compensated by the government. With the new government announcing 200 units free for domestic consumers using up to 500 units, it would have to bear the entire burden of ₹9.90 per unit for 2.20 crore of the 2.45 crore  consumers. This excludes the 20 lakh consumers who use more than 500 units bimonthly, according to the data submitted to the Tamil Nadu Electricity Regulatory Commission. The subsidy for 100 units will be covered for the 20 lakh consumers.