Relief in power tariff for industries in Maharashtra too little, too late

Mumbai: The Maharashtra authorities’s trendy energy tariff incentives for industries may additionally nevertheless now not make the state a competitive vacation spot compared to neighbouring states which offer inexpensive costs, enterprise executives said. Closing week, the nation announced inexpensive energy price lists for industries in Vidarbha, Marathwada, North Maharashtra, and commercial zones special as D and D+. Country electricity minister Chandrashekhar Bawankule said this has been carried out to disperse enterprise from the A, B, and C, zones which contain regions along with Mumbai metropolitan location, Pune, and Nashik districts to the less developed areas of Vidarbha, Marathwada, and North Maharashtra.

Currently, around 4.13 lakh industrial consumers in Maharashtra are charged power tariff in the range of Rs8.23 to Rs13 per unit depending on their consumption. Photo: Indranil Bhoumik/Mint

“Within the 2016-17 budget, we have already earmarked Rs.1,011 crore, which the nation would provide as a right away subsidy to the strength distribution application attributable to decreased electricity tariff for those areas. This incentive might also trigger opposition amongst regions to get investment and additionally inspire investors to observe newer regions for investment,” Bawankule stated.

Currently, round 4.13 lakh industrial consumers in Maharashtra are charged energy tariff Inside the variety of Rs.eight.23 to Rs.thirteen consistent with unit relying on their intake. Comfort has been provided on these tariff bands in pick areas with impact from 1 April this year. In Vidarbha, existing and new business purchasers gets an Alleviation of Rs.1.25 to Rs.1.75 according to unit. In Marathwada place that is drought-inclined, the advantage according to unit is Rs.1.50. North Maharashtra and regions exact D and D+ will get a consistent with unit Remedy of 50 paise to Rs.1.

The areas decided on for Relief in power tariff account for a 3rd or Rs.2,000 crore of state-owned Maharashtra Discom’s general annual sales of Rs.6,000 crore from business consumers.

Nagpur-based totally industrialist and chairman of Vidarbha industry Association’s electricity discussion board R.B. Goenka stated the incentives will assist present and new industry in those areas and additionally deliver back the ones consumers to Maha Discom who’re Currently shopping for electricity from different sellers the use of the open get entry to facility. He said many excessive anxiety users—those industries which consume greater than 1 lakh units consistent with month—had ceased to be Maha Discom’s consumers In the Closing 4 years because of excessive tariff. “They may come lower back now since the Maha Discom has offered aggressive tariff. The charge that industrial consumers are paying to buy power from open access is cheaper than compared to Maha Discom’s tariff. However different sellers may additionally lose their aggressive facet now with the relaxation in Maha Discom’s tariff,” Goenka stated.

Goenka, who’s an unbiased director on Maha Discom, said reduction in intake by industrial customers had triggered losses to Maha Discom. “This took place because numerous high net commercial purchasers left Maha Discom to shop for power from others,” he stated. Among 2010 and 2015, Maha Discom saw an almost 10% drop in the proportion of electricity consumption by means of excessive tension customers throughout the country.

Welcoming the sop for industrially backward areas, Pratap Hogade, strength region expert and president of Maharashtra Electricity customers Affiliation, however, stated the relaxation was ‘meagre’ if one takes into consideration the hike in tariff proposed by Maha Discom for the following 4 financial years starting 2016-17.

In March, Maha Discom proposed a mean tariff growth of 5.5% throughout its variety of 25 million consumers to meet revenue deficit of Rs.38,987 crore accumulated over time in particular because of the better feel of power buy and arrears due to subsidies declared every so often to agriculture customers. The idea is pending for approval with the Maharashtra Power Regulatory Fee (MERC). Hogade said Maha Discom had proposed to raise tariff for business clients by 50 paise per unit in 2016-17 to Rs.2 in 2020 across the state. “If Maha Discom’s notion is generic, the effective Relief in tariff for commercial purchasers in backward areas would be 30 paise to 60 paise in step with unit that is so meagre that it received’t assist the kingdom achieve business progress in those zones,” Hogade stated.

A spokesperson for Maha Discom, however, insisted that the suggestion for tariff growth had now not but been customary by the MERC. “We have most effective submitted our revenue plan and we will’t expect that it’s going to get prevalent. The MERC has rarely conceded to Maha Discom’s needs for tariff growth. For instance, in 2015-sixteen the MERC actually ordered a 5.75% reduce in tariff whilst we had demanded a 7.94% boom,” said the spokesperson.

Hogade said the tariff for enterprise in Maharashtra endured to be better compared to the neighbouring states even supposing one time-honored Maha Discom’s contention that the boom in tariff was now not effective yet. Tariff for commercial customers in Maharashtra was 25% to forty five% better as compared to states like Karnataka, Gujarat, Andhra Pradesh, Madhya Pradesh, Chhattisgarh, and Goa, Hogade stated.

“The comfort for backward areas is welcome. However, industries Inside the designated A, B, and C regions—which comprise the core of Maharashtra’s production may and account for nearly 50% of Maha Discom’s revenue from commercial customers are nonetheless subjected to expensive tariff. The base tariff for excessive anxiety and low tension business consumers in these regions is still Rs.8.23 and Rs.9.31 in keeping with unit respectively. Upload to this the fuel adjustment rate of 90 paise to Rs.1 in line with unit. None of the six neighbouring states has industrial tariff extra than Rs.6.eighty per unit while a few have it as little as Rs.4.80 and Rs.5.five. Even though the idea for tariff hike is rejected via MERC, the present day charge for the bulk of business customers is still high,” Hogade stated. He said due to Maha Discom’s better tariff, greater than 500 huge industrial clients have stopped buying energy from the kingdom application. “The industries that have left Maha Discom and moved to different vendors below the open get entry to gadget encompass large names like Mahindra, Tata Vehicles, Essar Steel, Garware, Kirloskar, Jindal Polyfilms, and CEAT. It’s far a major loss to the nation distributor,” Hogade said.