Failure to revise ‘Contracted Demand' leads to ₹4.88 crore excess power charges in 10 Tamil Nadu government buildings, says CAG report
The 10 departments, include Commissioner of Treasuries and Accounts, Saidapet; Tamil Nadu State Information Commission, Saidapet; Commercial Taxes and Registration Department; Tamil Nadu Public Service Commission; Directorate of Vigilance and Anti-corruption; Commissionerate of Municipal Administration ; Institute of Obstetrics and Gynaecology (IOG) and Government Hospital for Women and Children, Egmore; Directorate of School Education; Employees' State Insurance Hospital, Ayanavaram and the Government Polytechnic College. The CAG mentioned that government should direct all the departments to review the 'Contracted Demand' of all government buildings and revise the agreement with Tangedco based on actual consumption observed in these offices.
The 'Contracted Demand' for a HT connection is specified in the agreement between the consumer and Tamil Nadu Generation and Distribution Corporation Limited (Tangedco) and is fixed based on the request of the HT consumer. The Regulation 17(6) of TNESC enables HT consumers to reduce the existing contracted demand up to 50% once in a year, after expiry of the initial agreement period of one year. Tangedco shall effect such change within seven days from the date of receipt of application from the consumer. The Demand Charges component in the electricity bill is calculated based on the actual recorded demand or 90% of the 'Contracted Demand', whichever is higher. Audit scrutiny of records relating to vouchers for payment of electricity bills of 10 HT consumers in government departments during 2017-23, revealed that the 'Recorded Demand' was much lower than the 'Contracted Demand' during the entire period
Four HT consumers did not utilise even 50% of the 'Contracted Demand' in any of the months for which the EB bills were scrutinised by audit. Though the 'Contracted Demand' ranged between 120 KVA to 2,614 KVA, the corresponding maximum demand ranged only between 39.36 KVA and 1,283.70 KVA. The actual consumption ranged between 3% and 84.80% of the 'Contracted Demand'.
The average 'Recorded Demand' was as low as 19% (163 KVA compared to 'Contracted Demand' of 850 KVA) in Registration and Commercial Taxes department building. The Institute of Obstetrics and Gynaecology and Government Hospital for Women and Children, Egmore recorded the maximum average 'Recorded Demand' at 56% (449.20 KVA compared to 'Contracted Demand' of 800 KVA).
None of the offices revised the 'Contracted Demand' in spite of low utilisation, even though a provision was available. The proposal of the departments seeking the PWD (Electrical) for assessment of the HT demand and the assessment of the PWD arriving at the 'Contracted Demand' was not made available to audit to understand the basis of seeking such high demand which remained unutilised. Audit calculated the avoidable expenditure on Demand Charges by calculating the difference between the actual 'Contracted Demand' and a reasonable 'Contracted Demand' of each HT consumer. The reasonable 'Contracted Demand' was arrived at by adding 10% to the highest 'Recorded Demand' of each HT consumer.
The analysis revealed that, despite adopting the above methodology, the excess payment towards electricity charges calculated at the prevailing rates was ₹4.88 crore indicating that a more realistic revision would have resulted in savings in expenditure.
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