Elec­tric­ity Bills of In­dus­trial Units Likely to Wit­ness Steep Jump

The Economic Times - - Economy: Macro, Micro & More - Sarita.Singh@ times­group.com

New Delhi: Spot mar­ket power is set to be­come costlier as state-owned power distri­bu­tion com­pa­nies have pro­posed a hefty in­crease in levies im­posed on open­mar­ket con­sumers in their tar­iff pe­ti­tions for the com­ing year.

Distri­bu­tion com­pa­nies (dis­coms) have pro­posed rais­ing mul­ti­fold cross-sub­sidy sur­charges, net­work us­age charges and im­pos­ing ad­di­tional sur­charges that could in­crease elec­tric­ity bills of large con­sumers by upto 40%.

Ex­perts say im­pos­ing high charges on spot mar­ket pur­chases will hurt growth of in­dus­tries, ren­der­ing them un­com­pet­i­tive and hurt the gov­ern­ment’s Make In In­dia cam­paign.

State power dis­coms of Odisha have rec­om­mended rais­ing net­work-wheel­ing charges on com­mer­cial con­sumers in FY18 to ₹ 2.26 per unit from ₹ 0.63 per unit. The cross-sub­sidy charges for large in­dus­trial con­sumers are pro­posped to be raised from ₹ 1.91 per unit to ₹ 3.61 per unit.

The tar­iffs for large con­sumers in the state pur­chas­ing elec­tric­ity from spot mar­ket are likely to rise by over 40%.

Kar­nataka power distri­bu­tion com­pa­nies pro­pose to in­crease en­ergy charges, wheel­ing charges and cross-sub­sidy charges on open mar­ket power con­sumers by close to 22%.

Power util­i­ties of Mad­hya Pradesh seek to in­tro­duce an ad­di­tional sur­charge of .₹ 1.2 per unit on the power pro­cured form other sources, mak­ing such pur­chases costlier by about 24%. Delhi dis­coms have pro­posed rais­ing cross-sub­sidy charges but de­creas­ing ad­di­tional sur­charges on open-mar­ket elec­tric­ity deals, lead­ing to a net in­crease of 30-40 paise per unit.

The power distri­bu­tion com­pa­nies of Da­man and Diu have pro­posed 36 paise in­crease in cross-sub­sidy charges and 11 paise in­crease in wheel­ing charges lead­ing to a 12% raise in cost of spot mar­ket power pur­chase by in­dus­trial and com­mer­cial con­sumers.

Most states in­clud­ing Pun­jab, Ma­ha­rash­tra, Ra­jasthan and West Ben­gal alre- ady levy charges called ‘open ac­cess charges’ on their in­dus­trial and com­mer­cial con­sumers to de­ter them from buy­ing from spot mar­kets, and pro­tect their power distri­bu­tion com­pa­nies. Open ac­cess is a re­form an­nounced in the Elec­tric­ity Act 2003 that refers to en­abling buy­ers to choose source of elec­tric­ity and giv­ing them right on trans­mis­sion and distri­bu­tion sys­tem for trans­fer of power. Sta­te­owned power distri­bu­tion com­pa­nies fear los­ing their high-pay­ing in­dus­trial con­sumers to spot mar­kets though such trans­ac­tions con­sti­tute only1% of the coun­try's to­tal power con­sump­tion.

The Eco­nomic Sur­vey of 2016 had rec­om­mended that In­dian in­dus­tries should be re­lieved of the bur­den of sub­si­dis­ing elec­tric­ity sup­ply for agri­cul­tural and do­mes­tic con­sumers and al­lowed to pro­cure power from the open mar­ket.

In­dia En­ergy Ex­change direc­tor (busi­ness devel­op­ment) Ra­jesh K Medi­ratta said that in the long run, it is im­po­rant for states to let the in­dus­tries sur­vive. "At this stage, it is not good to dis­cour­age open ac­cess if the coun­try wants to en­cour­age do­mes­tic man­u­fac­tur­ing."

Elec­tric­ity prices for in­dus­tries in In­dia are the high­est in world as states of­fer free power to agri­cul­tural con­sumers and sub­sidised power to res­i­den­tial units.

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