Industry bodies defer move to surrender electricity load

Various industry associations yesterday decided to defer their proposed move to surrender the electricity load of power intensive units (PIUs) following an assurance from the government in Shimla that the recent hike in tariff would be reconsidered. Power Secretary Rakesh Kanwar assured them that he would do his best to resolve the issue.

Rajeev Singla, general secretary, HP Steel Manufacturers Association, said that various industry associations deliberated on the key subject at a conclave of the Confederation of Indian Industry (CII) and put across their viewpoints. The new power tariff has come into effect from October 1.

Singla said, “The electricity tariff has increased by 46 per cent in the past two years and as a result, the operations of the industry have become unviable. If the increased tariff is not rolled back, the industry will find it difficult to operate even for the next two to three months owing to this unsustainable burden on power-intensive industries. The tariff in Himachal, which is a power surplus state, is 50 paise per unit higher than Punjab.”

The government, which is reeling under a severe resource crunch, has imposed a milk cess of 010 paise per unit, environment cess ranging from 0.02 paise per unit to 0.10 paise per unit on various industrial consumers, besides withdrawing a subsidy of Re 1 on the power tariff.

The industry representatives said that the PIUs had a low power infrastructure cost and minimal line losses. “They are the major consumers of electricity, operate at a line loss rate of less than 2 per cent, significantly lower than the HP State Electricity Board’s average line loss of more than 10 per cent. This demonstrates their efficient use of the power infrastructure,” they added.

The industry said that the PIUs contributed over Rs 1,000 crore annually to the state’s revenue in the form of the Goods and Services Tax and provided employment to over 10,000 people. Besides, it also contributed Rs 50 crore in the form of the Additional Goods Tax to the exchequer.

The tariff for large consumers (above 2,500 kVA), which covers more than 30 per cent of the power consumption of Himachal, was far higher than Haryana, Punjab and Uttarakhand by 20 paise to 90 paise per unit.

This triple-fold hike has made the power tariff higher than those in Uttarakhand, Haryana, J&K and Punjab for the PIUs like steel and iron units, according to a comparison submitted by the industry to the state government.