Tamil Nadu Industry Bodies Demand Power Tariff Reforms to Boost Competitiveness

Industry associations in Coimbatore have urged the Tamil Nadu government to undertake power sector reforms to protect the competitiveness of the state's industrial sector. The Southern India Spinners' Association (SISPA) and the Coimbatore District Small Industries Association (CODISSIA) have highlighted several key issues in recent representations.

SISPA secretary S. Jagadesh Chandran noted that while avoiding an electricity tariff hike provides temporary relief, long-pending reforms are needed to enhance the competitiveness of the textile and spinning industries. Production costs have risen significantly due to increases in energy charges, maximum demand charges, peak hour charges, fixed charges, and other levies. The association seeks a review and fair revision of these charges based on operational capacity.

CODISSIA president V. Rangaswamy raised concerns about the draft Tamil Nadu Electricity Regulatory Commission (Multi-Year Tariff for Distribution) Regulations, 2026. The proposed fuel and power purchase adjustment surcharge (FPPAS) mechanism would allow automatic recovery of up to 90% of monthly cost variations without prior approval and without an annual cumulative ceiling. This unpredictability, he argued, adversely affects industries operating on thin margins and fixed-price contracts, impacting pricing, cash flows, export competitiveness, and investment decisions.

Both associations emphasized that Tamil Nadu's electricity tariffs are higher than those in competing states. They called for restructuring the tariff structure and removing network charges on rooftop solar projects to promote renewable energy. Rangaswamy stressed that the long-term financial sustainability of the electricity sector and industrial competitiveness are complementary goals that must be pursued together, urging the government to revisit the proposed FPPAS provisions before finalizing the regulations.