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SIMA hails Govt decision on captive power generation
Sep '08
Subsequent to the announcement made by the Hon'ble Electricity Minister of Government of Tamil regarding partially utilizing the idle capacity of furnace oil and high speed diesel oil captive generators for captive consumption to meet the acute power shortage being faced by the State, the industry associations had an internal meeting on 18th September 2008 to decide the ratio of sharing the additional captive generation cost.

Around 55 major industrial units and Associations including the Southern India Mills' Association participated in the meeting. The textile industry alone accounts for over 50% of the HT power consumption in the State. The industries in Tamil Nadu have invested over Rs.50,000 crores during the last five years and the textile industry alone has invested around Rs.35,000 crores. All these investments have been made hoping that the industries would get uninterrupted power supply. If the present power crisis continues, all these new investments would soon become NPAs.

Though the industries in Tamil Nadu are already incurring heavy cash losses on account of power and very many factors, all the industry Associations unanimously decided to share 25% of the additional cost incurred for operating the diesel gensets considering the benevolent approach of the Government.

In a Press Release issued here today, Dr K V Srinivasan, Chairman, The Southern India Mills' Association has hailed the government's move and appealed to expedite the implementation of the proposal submitted by the industries. He has also thanked the Government for taking a decision on the utilization of around 200 MW furnace oil based gensets and he has informed the Press that the Furnace Oil Scheme would be announced at any moment.

He has added that the furnace oil power generation reimbursement would be based on the tenders already quoted by the various industrial units in Tamil Nadu. He has appealed to the Government to announce an enhanced rate for the industries particularly, the textile industry, which is not able to avail Modvat. He has also appealed to consider the high transportation cost incurred by the industrial units to transport the furnace oil all the way from Chennai to different destinations, particularly the southern districts of Tamil Nadu.

Dr Srinivasan has mentioned that the total additional cost for operating gensets for the current diesel rate would work out to Rs.6.41 per unit of power excluding VAT. He has mentioned that the VAT would be only a notional income for the government and therefore, the same has not been considered while working out the additional cost for captive power generation. He has pointed out that the above system also saves around 18% technical and transmission loss to the TNEB since the industrial units themselves would consume the power generated by them.

He has said that initially the industries have submitted a proposal for 1000 MW power captive generation during the evening peak hours (6.00 p.m. – 10.00 p.m.). Dr Srinivasan has mentioned that the 25% share of the industries would be collected by way of fuel surcharge for the peak hour power consumption by all the HT and commercial units. He has added that the surcharge with 25% share would work out around 0.40 paise per unit.

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