Subsidy characterises power tariff for domestic consumers

According to the official data, 34,600 million units (MU) were consumed by the domestic category last year, accounting for about 35% of the total amount of units sold. 

Even after a few years of the implementation of the steep hike in power tariff,  “only a miniscule” section of domestic consumers appears to be paying more than the average cost of power supplied. 

In September 2022, a major hike in power tariff was carried out in the State. As of now, energy charges for the consumption of more than 1,000 units bi-monthly is ₹11.55 per unit, after excluding the subsidy of ₹0.25 per unit.  As per the revised estimates for the just concluded financial year (2024-25), the Average Cost of Supply (ACS) was ₹10.48 per unit. Regardless of the level of consumption, the first 100 units are provided to the consumers free of cost.  

Of a total of around 2.38 crore domestic consumers in the State, there are one lakh consumers who fall under the consumption level of over 1,000 units bi-monthly. “Even in their case, the average revenue realised is around ₹8.50 per unit which includes subsidy,” an official points out, contending that at none of the levels do domestic consumers pay more than ACS as the tariff is telescopic.

According to the official data, 34,600 million units (MU) were consumed by the domestic category last year, accounting for about 35% of the total amount of units sold.  In 1990-91, the share of the domestic consumers was around 16% which went up to about 21% in 2000-01 and 28% in 2020. 

As for the subsidy component payable by the State government, the first 100 units of consumption by the entire domestic category will cost the authorities around ₹ 5,738 crore in the current year (2025-26). As the government extends the subsidy even beyond the 100-unit consumption, the total cost of tariff subsidy for the domestic category has been estimated at about ₹7,753 crore.  Of the total revenue of ₹68,200 crore through the sale of power during 2024-25 (apart from the tariff subsidy of ₹15,770 crore), the domestic category’s contribution was ₹11,300 crore.