Maharashtra Industry bodies are opposing raised industrial power tariff

The current hike in industrial power tariff appeared to be not going down well with the regional industry as a number of bodies and associations of entrepreneurs are claiming that they are distressing due to it. The representatives of these organizations observed that along with hike in power tariff, the power utility has been striking a heavy penalty on the consumers making it more challenging their continued existence.

The Maharashtra State Electricity Distribution Company Limited (MSEDCL) has lately launched the new power tariff system that carried into effect from September 2018.

There are some of the small-scale associations have been opposing this new power tariff system on which tariff is raised to Rs. 9 per unit. The Thane Small Scale Industries Association (TSSIA), Maharashtra Chamber of Commerce, Industry and Agriculture (MACCIA), and the Chamber of Marathwada Industries & Agriculture, Aurangabad in separate representations, argued that a 50 percent reduction in power factor incentive (to 3.5 per cent from 7 per cent) has severely impacted electricity bills.

Mr. Santosh Mandlecha, President of the Maharashtra Chamber of Commerce, Industry and Agriculture (MACCIA),  have demanded the withdrawal of the tariff hike on the grounds that it has caused serious losses to industries and also to state government’s revenue. They panic that the higher the tariff, especially in the current economic slowdown, will further adversely impact the financial health of the industry. As Electricity is consumed on each segment of the SMEs such as food processing, Automobile, Electrical and electronics industries, in that case it might be a big loss for the SME sector. He also said that it’s unbearable that due to this big decision of power tariff hike, power subsidy is also being  stopped for SMEs.

The Thane Small Scale Industries Association has also said that “ It is the basic thing that the government must solve this problem, as it has every right to retain industrial power tariff in the state. Industrial Power Tariff of MSEDCL at present approved by MERC is approximately 20% to 35% higher as compared to all other adjoining states. Electricity rates for Domestic, Commercial and Agricultural categories have also reached the utmost level in the country. In September 2018 MERC has approved Rs 20651 Crs i.e. average 15% hike in tariff. 6% means Rs 8268 Crs are being recovered through tariff hike till March 2020. An additional burden is Regulatory Assets. This amount of Rs 12382 Crs will be recovered after April 2020 with Interest from all the consumers. All this is an unaffordable heavy burden on the consumers. This highest level of the Tariff is causing heavy losses to Industries & to the revenue of the Government of Maharashtra also. So the government should withdraw the said Tariff Hike completely.”

“Decrease in the power factor incentive is a structural transformation,” says Ram Bhogle, president of the Chamber of Marathwada Industries & Agriculture, “and MahaVitaran should not have prepared it in the midterm tariff review; it should have been prepared appropriately in the new tariff amendment proposal effectual from 2020-21. This has resulted in advanced rates, which required to be re-evaluated.” The industry bodies have lately filed a review appeal with the Maharashtra Electricity Regulatory Commission (MERC).

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