If you live in Tamil Nadu and receive an electricity bill from TANGEDCO, you have probably noticed that your bill does not simply multiply your total units by a single rate. Instead, it applies different rates to different ranges of consumption – this is the slab-based tariff system.
This guide gives you a complete, plain-language explanation of how the TANGEDCO electricity tariff works for domestic consumers in 2024 – 2026 including the current slab rates, the updated 200 free units scheme announced by the Tamil Nadu CM, and how to calculate your own bill step by step.
Try it yourself: Use our TNEB Bill Calculator to instantly calculate your bill using these exact tariff slabs. Enter your units and see the full slab-wise breakdown.
What Is the TANGEDCO Domestic Tariff?
TANGEDCO (Tamil Nadu Generation and Distribution Corporation) is the body responsible for electricity distribution in Tamil Nadu. The domestic tariff applies to all households under the LT-IA (Low Tension – Domestic)consumer category – which covers the vast majority of residential electricity connections in the state.
The tariff is structured as a slab-based, telescopic pricing system. This means different unit ranges are charged at different rates, and crossing certain consumption thresholds changes the rates applied across all slabs – not just the units above the threshold.
Current Domestic Tariff Slabs (Effective May 2026)
As of May 2026, two subsidy tiers are in effect depending on your bi-monthly consumption. The base slab rates from July 2024 remain unchanged.
For consumers using 500 units or below (New Scheme 200 units free)
| Units Consumed (Bi-monthly) | Rate Per Unit | Notes |
|---|---|---|
| 1 – 200 units | ₹0 (Free) | New 200-unit subsidy — announced May 2026 |
| 201 – 400 units | ₹4.70 per unit | Charges begin from 201st unit |
| 401 – 500 units | ₹6.30 per unit | Approaching 500-unit threshold |
For consumers using above 500 units (Existing Tariff 100 units free)
| Units Consumed (Bi-monthly) | Rate Per Unit |
|---|---|
| 1 – 100 units | ₹0 (Free) |
| 101 – 400 units | ₹4.70 per unit |
| 401 – 500 units | ₹6.30 per unit |
| 501 – 600 units | ₹8.40 per unit |
| 601 – 800 units | ₹9.45 per unit |
| 801 – 1000 units | ₹10.50 per unit |
| Above 1000 units | ₹11.55 per unit |
What Is the Telescopic Tariff System?
The term “telescopic” refers to how the tariff structure collapses or expands depending on total consumption. In Tamil Nadu’s system, when your bi-monthly consumption exceeds 500 units, the lower slab rates that applied below 500 units are no longer valid — and higher rates are applied across the entire consumption, not just the units above 500.
This is the root cause of the sharp bill jumps that many Tamil Nadu consumers experience when they cross the 500-unit mark. The system is designed to incentivise lower consumption while ensuring higher consumers pay progressively more.
Fixed Charges for Domestic Consumers
In addition to energy charges, TANGEDCO levies a fixed charge based on your connected load, regardless of how many units you consume:
| Connected Load | Fixed Charge (per 2 months) |
|---|---|
| Up to 500 watts | ₹30 |
| 501W – 1 kW | ₹45 |
| Above 1 kW | ₹45 + ₹30 per additional kW |
Free Electricity Scheme: How It Works (Updated May 2026)
Tamil Nadu now has two active subsidy tiers, determined by your total bi-monthly consumption:
If you use 500 units or below (New Scheme):
- First 200 units are completely free
- Charges begin from the 201st unit at ₹4.70/unit
- No application needed applied – automatically to all domestic (LT-IA) consumers
If you use above 500 units (Existing Tariff):
- First 100 units are free
- Charges begin from the 101st unit
- Telescopic repricing applies across all lower slabs – this is why bills jump sharply above 500 units
If you use 500 units or below, you benefit from 200 free units — double the previous subsidy. Tracking your usage and staying at or below 500 units bi-monthly is the single most impactful way to reduce your TNEB bill.
How Often Are Tariff Rates Revised?
TNPDCL revises tariff rates periodically, typically following a petition to the Tamil Nadu Electricity Regulatory Commission (TNERC). The last major revision was in July 2024. Before that, tariffs had been revised in 2020 and 2017.
When a new tariff is announced, it typically takes effect from the next billing cycle after the announced date. TANGEDCO publishes tariff orders on the TNERC website and issues press releases for each revision.
Frequently Asked Questions
Why does my bill double when I cross 500 units?
Because TANGEDCO uses a telescopic tariff. When consumption crosses 500 units, the rates for the lower slabs (101–500 units) are repriced at higher rates – not just the units above 500. This restructuring causes a disproportionate jump in the total bill.
How does the free electricity subsidy work for domestic consumers?
Tamil Nadu operates two subsidy tiers as of May 2026. If your bi-monthly consumption is 500 units or below, the new 200 free units scheme applies — first 200 units are free and your bill is ₹0 if you use 200 units or less. If your consumption exceeds 500 units, the original 100-unit subsidy continues — first 100 units are free and charges begin from the 101st unit. Both subsidies apply automatically with no separate application required.
Do commercial connections use the same tariff?
No. Commercial connections fall under LT-II and have different tariff rates and slab structures. The rates described in this article apply only to domestic (LT-IA) consumers. Agriculture and industrial connections have their own separate tariff schedules.
When was the last tariff revision by TANGEDCO?
The most recent tariff revision took effect in July 2024. This was approved by the Tamil Nadu Electricity Regulatory Commission (TNERC). The rates listed in this article reflect this latest revision. Additionally, in May 2026 the Tamil Nadu CM announced an expanded free electricity scheme – increasing the subsidy from 100 to 200 free units for domestic consumers using 500 bi-monthly units or below. This was layered on top of the July 2024 tariff structure without changing the underlying slab rates.