In what may be a gain for farmers, but a loss for the manufacturing sector, Maharashtra Electricity Regulatory Commission (MERC) has approved a hike in cross subsidy surcharge (CSS) from Rs 1.18-1.60 per unit to Rs 2.30-2.75 a unit respectively.
This has left the industries miffed. CSS is a charge levied from the industry when it buys power from open market rather than the state-owned utility MSEDCL.
It is levied to make good the losses on account of cheap power for agricultural and other consumers. For this reason, MSEDCL charges industry a higher rate but if the industries buy power from sources other than MSEDCL, government does not get the money for funding subsidy. CSS is charged on purchases from open market to bridge the gap.
Vidarbha Industries Association (VIA) has been lobbying hard to do away with the CSS. However, the deputy chief minister Ajit Pawar, who also heads the power ministry, has flatly refused on the grounds that funds were needed for subsiding the farmers and poor consumers. MERC decision to hike the CSS has left the industries disappointed. VIA said that it would appeal the order.
R B Goenka, who represents VIA in MERC, said the order would kill competitiveness of private power players operating in open market. After adding the increased CSS, power from open market becomes almost equal to MSEDCL.
"MSEDCL charges Rs 7.50 per unit on average. With higher CSS, power from open market would be costlier at Rs 7.65 a unit. If the load factor incentive is claimed by a consumer, MSEDCL tariff can be further reduced to around Rs 6.75 a unit," said Goenka.
Goenka claims high power tariff had hit industrial production in state. He is relying on year-on-year change in consumption by high tension users. "The consumption has come down by 2% this year," he said. HT users include commercial establishments, townships as well as industries. According to Goenka's estimates it was likely that the industrial consumption may have gone down by 5% but consumption by commercial establishments and townships increased leading to a net fall of 2%.
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