TNERC Tariff Schedule: Is Commercial "LT-2" or "LT Tariff V"?
If you inspect your physical TNPDCL electricity bill or log into the TNPDCL consumer billing web portal, you might notice varying designations. Many third-party websites loosely call commercial meters "LT-2" (adopting terminology from other Indian states such as Karnataka or Maharashtra). However, in Tamil Nadu's official regulatory framework established by the Tamil Nadu Electricity Regulatory Commission (TNERC), low-tension connections are indexed using Roman numerals:
- Tariff LT-IA: Domestic households, apartments, and residential common lighting.
- Tariff LT-IB: Hut consumers and tiny rural dwellings.
- Tariff LT-IIA: Public lighting and local-body drinking water supply systems.
- Tariff LT-IIB: Recognized private/government educational institutions and public hospitals.
- Tariff LT-IIC: Places of public religious worship.
- Tariff LT-III: Cottage industries, tiny industries, and small power looms.
- Tariff LT-V (or LT-5): General Commercial and Non-Domestic Consumers.
Therefore, any retail shop, business office, showroom, hotel, private hospital, tuition center, or professional studio in Tamil Nadu officially falls under LT Tariff V. On your physical bill, your tariff code is usually printed as LT-5 or LT-V.
Commercial vs Domestic — Why Your Rate Is So Different
If you have ever compared your shop or office electricity bill to your residential bill for roughly the same amount of power, you may have been surprised by the sharp price divergence. Commercial power in Tamil Nadu costs between 2× and 4× more per kilowatt-hour than domestic supply. This divergence stems from three deliberate structural policy decisions:
| Feature | Domestic (LT-1A) | Commercial (LT Tariff V) |
|---|---|---|
| Free units subsidy | 200 (≤500u cycle) or 100 (>500u) | None — billed from unit 1 |
| Entry-level rate | ₹0.00 | ₹6.50 / unit |
| Rate above threshold | ₹4.70 – ₹11.55 (telescopic) | ₹9.80 / unit flat above 100 units |
| Fixed demand charge | ₹0.00 / kW (waived) | ₹150.00 / kW / month |
| Electricity duty | 0% (state-subsidized) | 5% on energy + fixed charges |
In India's utility model, commercial and industrial tariffs incorporate a cross-subsidy surcharge. Higher commercial billing rates subsidize the free power delivered to agricultural pumps and domestic households.
Real-World Commercial Bill Breakdown: 2 Worked Examples
To understand how your bill is calculated line by line, consider these two common commercial use cases calculated using TNPDCL's published billing formulas:
Worked Example 1 — Small Shop (350 units, 2 kW sanctioned load)
Retail Store / ClinicA neighbourhood stationery shop, grocery store, or small doctor's clinic with 2 ceiling fans, LED lighting, a desktop computer, and a small refrigerator using 350 units in a monthly billing cycle with a 2 kW connected load.
* Note: If your commercial service is billed on a bi-monthly cycle (60 days), the monthly fixed charge is multiplied by 2 (₹600.00), bringing the bi-monthly duty to ₹185.00 and total payable to ₹3,885.00.
Worked Example 2 — Small Office (800 units, 5 kW sanctioned load)
Commercial Office / StudioA professional office (accounting firm, design agency, or law office) running 2 split air conditioners, 6 laptops/workstations, printer, router, and lights consuming 800 units per month on a 5 kW three-phase connection.
Some commercial bills carry a fluctuating Fuel Cost Adjustment (FAC) surcharge per unit depending on coal and generation import tariffs incurred by TNPDCL. TNPDCL has not gazetted a permanent fixed FAC rate for the commercial category at this writing. Check the specific surcharge row on your physical bill and add it to your total calculation if present.
Can I Run a Business on a Domestic Connection Instead?
Many small business entrepreneurs and freelancers ask: "Can I just use my home's domestic meter to run my business and save money on power bills?"
The short answer is: No — not legally, and not for long.
Under the Tamil Nadu Electricity Regulatory Commission (TNERC) distribution code, Tariff LT-1A is legally reserved strictly for residential premises, domestic appliances, and common lighting in apartment complexes. Conducting unauthorized commercial operations — such as opening a retail store, a beauty parlour, a tailoring shop with commercial sewing machines, a private coaching center with hired teachers, or a rented commercial guest house on a domestic meter — is classified as unauthorized use of electricity.
When TNPDCL vigilance squads or field assessment inspectors uncover commercial activities operated on a domestic service connection, they issue a provisional assessment order under Section 126. The penalty is calculated at two times the applicable commercial tariff rate, applied retrospectively for the entire period of unauthorized use (up to 12 preceding months if the starting date cannot be proven). Furthermore, the connection is forcibly reclassified to LT Tariff V, and the consumer must clear all compounding charges to avoid disconnection.
The minor monthly difference you save by evading commercial registration is completely wiped out by a single inspection penalty. Always obtain an official separate LT Tariff V service connection for dedicated business premises.
Is the 200 Free Units Scheme Available for Commercial Connections?
No. On 10 May 2026, the Government of Tamil Nadu raised the bi-monthly domestic free power allocation from 100 to 200 units for households using 500 units or less (see our comprehensive TNEB Old vs New Tariff 2026 Comparison Guide).
This policy and its ₹1,545.14 crore TNERC subsidy provisioning apply exclusively to Domestic LT-1A connections. Commercial, non-domestic, and industrial consumers receive zero free units. If your shop or office consumes 90 units in a month, you do not pay ₹0; you pay 90 × ₹6.50 = ₹585.00 plus fixed charges and duty.
How Small Businesses in Tamil Nadu Can Lower Commercial Power Bills
Because commercial energy carries a steep ₹9.80/unit marginal charge above 100 units, commercial owners can significantly reduce overhead through targeted energy measures:
1. Optimize Sanctioned Load
Every kilowatt of sanctioned load costs ₹150/month regardless of whether you consume energy. If you hold a 6 kW connection but your peak concurrent demand never crosses 3 kW, apply to TNPDCL for a load reduction to save ₹450/month in fixed charges alone.
2. Rooftop Solar Net Feed-In
Commercial establishments operate predominantly during daytime peak sunlight hours. Installing commercial rooftop solar enables direct self-consumption, offsetting power that would otherwise cost ₹9.80/unit plus 5% duty.
3. Inverter ACs & LED Lighting
Air conditioning accounts for 60%–75% of commercial office consumption. Setting office thermostats to 24°C instead of 18°C reduces AC power draw by 18% to 24%, keeping more of your monthly usage in the lower rate bracket.
4. Maintain Power Factor
For commercial connections with inductive loads (refrigerators, deep freezers, large compressors, motors), maintaining a power factor above 0.85 avoids reactive energy penalties that TNPDCL levies on commercial meters.
Frequently Asked Questions: TNEB Commercial Tariffs
Clear, regulatory answers for shopkeepers, business owners, and commercial facility managers in Tamil Nadu.
What is the TNPDCL commercial electricity rate in 2026?
TNPDCL bills commercial (non-domestic) connections under LT Tariff V at ₹6.50 per unit for the first 100 units, and ₹9.80 per unit for every unit consumed above 100, plus a ₹150 per kW per month fixed demand charge and 5% statutory electricity duty on total charges.
Do commercial connections get free units like domestic ones?
No. The domestic 200 free units subsidy (for usage up to 500 units) and the baseline 100 free units subsidy apply exclusively to LT-1A domestic residential households. Commercial (LT Tariff V) connections do not receive free units — every single unit is billed starting from unit one.
Can I use my home electricity connection for a small shop or business?
No. Domestic LT-1A tariff is legally restricted to residential living premises. Operating a shop, commercial office, coaching center with dedicated staff, clinic, or cloud kitchen on a domestic meter is treated as unauthorized electricity use under Section 126 of the Electricity Act, 2003, and attracts penal assessments at twice the applicable commercial rate.
Is the commercial tariff billed monthly or bi-monthly?
Billing frequency depends on your sanctioned load and metering arrangement. Small commercial retail shops with single-phase low loads are frequently billed on a bi-monthly (60-day) cycle alongside domestic routes, whereas three-phase commercial establishments with higher sanctioned loads (above 10 kW or with demand-based metering) are assessed monthly. Fixed demand charges (₹150/kW/month) are scaled to match the cycle length (₹300/kW for bi-monthly).
Are there different commercial sub-categories with different rates?
Yes. General commercial shops, showrooms, and private offices fall under Low Tension Tariff V (LT-V). Recognized educational institutions and private non-government hospitals fall under LT-IIB, government hospitals and street lights fall under LT-IIA, places of worship fall under LT-IIC, and heavy commercial loads exceeding 112 kW transition to High Tension (HT) commercial tariffs under HT Tariff III with Time-of-Day (ToD) metering.