Maharashtra Government to reduce power tariff for Vidarbha Industries...

 

In a big relief to the Vidarbha industries, the Maharashtra government, on Thursday, declared that it would reduce the recently increased power tariff for the industries on an urgent basis.

Industries minister Narayan Rane made the announcement in the assembly while replying to a calling attention motion move by MLA Devendra Fadnavis highlighting various problems faced by industries in Butibori and Hingna areas.

The minister assured the house to conduct an 'industry friend' meeting in the city, instead of Mumbai, to boost the local establishments and also to attract new investments. He also assured to take positive steps on reducing water charges for the industries.

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Maharashtra may lower industrial power tariff...

 

Industries in states reeling under high power tariffs may be in for some relief. Fear of losing investment to neighbouring states that have lower tariff might result in state lowering its tariff to competitive levels.

The government will soon decide on the demand of matching the power tariff for industrial belts in the state with those in Gujarat and Madhya Pradesh. The assurance came from revenue minister Narayan Rane during the discussion over the calling attention motion moved by leader of opposition Eknath Khadse in the legislative assembly.

Khadse pointed out that over 500 small and big industrial units in Tarapur in Thane and a few surrounding areas had either downed their shutters or shifted base to neighbouring Gujarat and Madhya Pradesh due to more efficient and cheaper power there. He said recently the state had cut power supply to around 100 units in Tarapur MIDC citing they had breached pollution rules. This, Khadse said, not only led to unemployment in the state but also resulted in industries shifting to other states. According to him, power tariffs in other states were much lower compared to those in Maharashtra.

Rane said within a few days the government would decide on matching the power tariffs with those in other states pointing out that his ministry had already initiated Rs 3000 crore programme to rebuild basic amenities in industrial pockets of the state.

Later, addressing local businessmen at Vidarbha Industries Association (VIA), the minister said a committee had been formed to review the tariffs and a decision could be expected by Friday. "I agree high power tariffs have been bothering the industries and the issue will be addressed." Later he told TOI that review of power tariffs for all categories of consumers was being considered and not just for industries alone. This includes agriculture and even domestic power users. He hinted that most probably the latest hike of Rs 1.60 per unit would be revised.

The minster was reluctant to look into other demands such as reducing the rates charged for land in the MIDC's estates on the grounds that the government needed funds to set up infrastructure. "In Vidarbha alone tenders for setting up industrial infrastructure to the tune of Rs 470 crore had been floated," he said.

Members of the Butibori Manufacturers Association (BMA) demanded a six month breather from action to take back vacant plots in the estate. BMA vice president Puneet Mahajan said many entrepreneurs could not set up the factories due to recession and needed six months to fulfill the conditions. Rane agreed to look into it though MIDC's CEO Bhushan Gagrani expressed reluctance.

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Cross-subsidy surcharge in open access to rise in Maharashtra...

 

Industries in Maharashtra will have to shell out more to avail open access due to a rise in cross-subsidy surcharge (CSS). The trigger is a recent order by the Maharashtra Electricity Regulatory Commission (MERC) to increase CSS from September 1 this year with retrospective effect.

Industry bodies argue open access will become an unviable proposition because, apart from higher CSS, they will have to pay charges towards transmission and distribution losses, wheeling charges and administrative charges. This will amount to more than Rs 3.60 per unit over and above the purchase of power through open access.

For extra high voltage (EHV) express feeder consumers, CSS in open access has increased from Rs 1.63 a unit to Rs 2.75 a unit; for EHV non-express feeder consumers, it has risen from Rs 1.20 a unit to Rs 2.26 a unit. In the case of high-tension express feeder consumers, CSS has increased to Rs 2.30 a unit from Rs 1.18 and for high-tension non-express feeder consumers, it has risen from 76 paise a unit to 1.82 a unit.

Jayant Deo, founder member of Maharashtra Electricity Regulatory Commission, told Business Standard: "'The increase in CSS is against the Electricity Act, 2003 and also the National Tariff Policy. In fact, as per the third proviso of section 42 (2) of the Electricity Act, 2003, the surcharge and cross-subsidies are required to be progressively reduced in the manner as may be specified by the regulator. However, in this case, MERC has not given the roadmap for the same. MERC’s order is against the very preamble of the Electricity Act, 2003 which demands transparency in the subsidies."

On the other hand, R B Goenka, chairman of Vidarbha Industries Association's (VIA) Energy Cell, said there won't be any competition in the power sector and the consumers drawing power from the state-run Maharashtra State Electricity Distribution Company will have no other option to purchase power from it despite high tariff. "In our view, the CSS is unrealistic and misplaced. CSS in open access cannot be increased till a road map for reduction in cross-subsidy is decided,'' he added. According to Goenka, VIA will soon approach the Appellate Tribunal for Electricity challenging the MERC's order.

According to S L Patil, advisor, Thane Belapur Industries Association, industries will not be able to avail cheap power from various sources in the country. Higher CCS, as proposed, will kill the spirit of competitiveness in the power sector and is detrimental to industrial growth, which is already struggling with the high cost of inputs, he noted.

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Industry users unite against high power tariff in Maharashtra...

 

High-tension industry consumers in Maharashtra with a monthly consumption of 100,000 units are up in arms against the high power tariff in the state. Industry bodies have argued that tariff charged by state-run Maharashtra State Electricity Distribution Company (MahaVitaran) is higher by Rs 2 to 2.50 per unit compared to other states.

As per the latest statistics available with the Maharashtra Electricity Regulatory Commission, Maharashtra tops the list with the per unit tariff of Rs 8.82 followed by Delhi (Rs 6.64),Tamil Nadu (Rs 6.04), Jharkhand (Rs 5.82), Karnataka (Rs 5.56), Chhattisgarh (Rs 5.46), Odisha (Rs 4.95).

Of MahaVitaran's 22.1 million consumers, 312,000 are from industry and of these 12,000 are high-tension users. MahaVitaran mobilizes nearly Rs 10,000 crore annually from these high tension consumers to cross-subsidize agricultural users in particular. MahaVitaran has sought from the state government Rs 3,800 crore of the total dues worth Rs 8,000 crore from farmers.

R B Goenka, chairman, energy cell of Vidarbha Industries Association told Business Standard, "In current scenario, the tariff has increased to un-sustainable limits. It will become difficult for industries to use such high cost energy for running their Industries and will have to close down because power in neighboring states is much cheaper. Industries in Maharashtra cannot compete with industries in neighboring states."

MahaVitaran official said the discom is giving a rebate of Rs 2.50 per unit during night for industry consumers. However, industry bodies have argued that despite this concession tariff continues to be the highest.

Meanwhile, the state government has taken a serious note and formed a cabinet sub committee led by industries minister and former chief minister Narayan Rane to suggest ways to lower the industry tariff.

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Hearing in MERC on the petition filed by vidarbha industries against MSEDCL on billing issue...

 

Maharashtra Electricity Regulatory Commission (MERC) will on November 13 hear a petition filed by industries against illegal bills issued by MSEDCL in September. Vidarbha Industries Association (VIA) too has filed the petition on behalf of all industrial associations in Vidarbha.

MERC in August had allowed MSEDCL to levy six surcharges from September. However, MSEDCL levied them in August bills itself in violation of Commission's order. In spite of protests by industrialists, MSEDCL did not provide any relief. The surcharges have increased electricity bills by 20%.

The industrialists have contended that while it does not matter to residential and commercial consumers whether they start paying surcharges from August or September, industries had suffered heavy losses. The reason is that industries had fixed the price of their goods on the basis of power tariff prevailing in August. Had they known the power rates would increase by 20% they would have increased price accordingly. However, they had sold their products at lower prices in August but the input cost had increased which caused them losses.

Nineteen industries and VIA have filed similar petition and hence MERC has clubbed them. They have demanded that the Commission should register case against MSEDCL officials under Section 142 & 146 of Electricity Act for violating MERC's directives. An organization or official convicted under these sections can be fined up to Rs 1 lakh.

The industries have also prayed that MSEDCL be directed to issue corrected bill for August 2013 without surcharges. They have also demanded that only three surcharges instead of six should be levied in September and corrected bills for this month should also be issued. All consumers should be refunded excess amount with interest.

This is the first step by industries and consumers to fight high handed behaviour of MSEDCL. They also plan to challenge MERC's order on six surcharges in Appellate Tribunal for Electricity (ATE) and lodge a complaint against MSEDCL in Competition Commission of India for misusing its power in a monopoly situation.

Many industrialists had earlier decided not to pay August bills but this was opposed by textile industries and this form of protest was dropped. Now the industries are concentrating on legal measures and taking up the issue with chief minister Prithviraj Chavan. The industrialists have also joined hands with other consumers to expose MSEDCL and Mahagenco. MSEDCL's inflation of farmers' bills has become a major embarrassment for the distributor while Genco is at pains to explain its extremely high cost of generation.

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