CAG report says

The department failed to modify the “contract demand” based on actual electricity consumption, resulting in electricity bills of over Rs 4.88 crore in 10 government buildings in Chennai. According to the report of the Tamil Nadu Assembly as of Tuesday, March 29, 2023, on April 29, 2025, and as of Tuesday, March 29, 2025, the correction of the power factor of the government in the construction of another government has resulted in a avoidance of Rs 168 crore.

These 10 departments include Treasury and Accounts Commissioner, Sayed; Tamil Nadu State Information Commission, Sayed; Department of Business Taxation and Registration; Tamil Nadu Public Service Commission; Vigilance and Anti-Corruption Bureau; Municipal Administration; Institute of Obstetrics and Gynecology (IOG) and Government Women and Children’s Hospital, Egmore; School Education Bureau; Staff State Insurance Hospital, Ayanavaram and Government Polytechnic Institute. The CAG mentioned that the government should direct all departments to review the “contractual needs” of all government buildings and modify the agreement with Tangedco based on actual consumption observed in these offices.

The “contractual requirements” for HT connections are specified in the agreement between the consumer and Tamil Nadu Generation Company Limited (TangedCo) and determined according to the requirements of the HT consumer. Article 17 (6) of TNESC enables HT consumers to reduce existing contract demand to up to 50% of the year one year after the expiration of the initial agreement term of one year. Tangedco should make such changes within 7 days from the date the consumer receives the application. The demand fee part of the electricity bill is calculated based on 90% of the actually recorded demand or “contract demand”, whichever is higher. Review of voucher-related voucher reviews for electricity bills of 10 HT consumers in government departments during 2017-23, showing that the “recorded demand” is much lower than the “contract demand” throughout the period

In any month when EB bills are audited, four HT consumers didn’t even use 50% of the “contract demand”. Although the “contraction demand” is between 120 kVa and 2,614 kVa, the corresponding maximum demand is only between 39.36 kVa and 1,283.70 kVa. The actual consumption ranges between 3% and 84.80% of the “contract demand”.

In registered and commercial tax department buildings, the average “record demand” is as low as 19% (163 kVA compared to 850 kVa’s “contract demand”. The highest average “recorded demand” for obstetrics and gynecology and government hospitals in Egmore is 56% (449.20 kVa, compared to the “contract demand” of 800 kVA).

Despite the provisions, no office has yet to modify the “contract demand” even with lower utilization rates. There is no proposal to the audited department to evaluate HT requirements and an assessment of PWDs that meet the “contractual requirements” to understand the basis for seeking such high demands that have not been fully utilized. The audit calculates avoidable on-demand expenses by calculating the difference between the actual “contract demand” of each HT consumer and a reasonable “contract demand”. A reasonable “setting demand” is derived by increasing the maximum “recording demand” of each HT consumer by 10%.

Analysis shows that despite the above approach, the overpayment of electricity bills calculated at the current rate is Rs 4.88 crore, indicating that a more realistic revision will lead to expenditure savings.