Maintenance of street lights and water supply are the two major functions of the Village Panchayats. Approximately, 70% of the income of the Village Panchayats used to be spent on payment of electricity charges. It was brought to the notice of the Government that in many cases, TNEB raised the bills on Village Panchayats on commercial rates without proper meter reading and levied 12% interest on the dues pending for more than 45 days. Undue delays were also noticed in obtaining estimation for installation of new street lights from TNEB authorities. The Government implemented a series of measures to settle some of these long term problems persisting between TNEB and the Village Panchayats.

The Government have, vide G.O.Ms.No.95 Energy (D2) Department, dated 12.10.2007 reduced the tariff of the EB service connection utilized for public lighting and water supply connection by Village Panchayats from Rs.3.40 per unit to Rs.3 per unit. The Government have also vide G.O.Ms.No.111 R.D. & P.R. Dept. dt.26.6.2007 announced a uniform rate per pole of Rs.9,500/- for installation of new street lights by Village Panchayats. The period of payment for EB charges has been raised from 20 days to 60 days for the Village Panchayats, and the interest rate payable by the Village Panchayats for payments beyond 60 days has been reduced from 12% to 6%. The surcharge of Rs.18.46 crores prior to 13.3.2007 has been written off.

Based on the Government’s direction, TNEB has taken steps to provide electricity meters to all those service connections of Village Panchayats which didn’t have meters, besides replacing defective meters. Meter cards have been provided to all service connections in rural areas and TNEB has been asked to raise bills based only on the initial and final readings of the meters. Steps have also been taken to pay up all the arrears due from Village Panchayats to TNEB. Where the arrears have been cleared, an entry that “No arrears are due pertaining to this service connection as on .....” has been directed to be made on the meter cards in order to enable the Village Panchayats to start with a clean slate in future.