SIMA upset over hike in TN electricity tariff

The industry which has been attracting over 60% of the total investments made in the country during the years between 2003 and 2007, could not attract any investment during the last couple of years owing to power crisis. 

The State is also gradually losing its competitive advantage on account of raw material cost, transportation as the State has to outsource over 95% of the raw material from States like Gujarat and Maharashtra by spending over Rs.40,000 per lorry/ per trip which was only around Rs.10,000/- to Rs.15,000/- per lorry/per trip, a few years back.  In the above situation, Tamil Nadu Electricity Regulatory Commission (TNERC) has passed an order announcing revised tariff for the year 2013-14 for the HT consumers increasing the cross subsidy surcharge steeply. 

The textile industry is able to get grid supply only ranging between 35% and 45% depending upon the wind power supply.  Moreover, the HT industries are subjected to 40% power cut and four hours evening peak hour restriction even during peak wind season.  Though HT consumers have been demanding for equal distribution of power shortage to sustain their survival, it has not been considered by TANGEDCO. 

Such a uncompetitive power scenario will not only discourage any new investment in the State but would also lead to large scale migration of the existing manufacturing facilities to other States like Gujarat, Maharashtra, etc., which have come out with innovative and industry-friendly textile policies.

Mr S Dinakaran, Chairman, The Southern India Mills’ Association (SIMA) has appealed to the TNERC to roll back cross subsidy surcharge for the HT consumers which is currently ranging between Rs.1.66 to Rs.2.07 and increased to Rs.3.40 to Rs.3.61 per unit depending upon the voltage for the HT industries.  Mr.Dinakaran has also appealed to TNERC and the Hon’ble Chief Minister of Tamil Nadu not to levy any cross subsidy surcharge as long as the R&C measures are in vogue.

SIMA Chief has added that though the Madras Court has stayed the levy of cross subsidy surcharge, the Court has stated that the HT consumers have to pay the cross subsidy charges with 9% interest rate if the final judgment goes in favour of TANGEDCO. 

SIMA Chairman also has stated that the HT consumers have to purchase third party power on a 24-hour basis rather than for a specific period owing to huge cost difference and the diesel power is totally unviable due to exorbitant cost.  He has further stated that the corridor congestion in the Southern Load Depsatch Centre has already made the open access power cost very exorbitant and the proposed increase in the cross subsidy surcharge would make all the manufacturing units unviable.