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Objecting to the increase in demand charges which will hike the monthly power bill by three to five per cent for medium and large category industries in the state, the investors today said this was contrary to the assertions of the state government for having frozen the power tariff for five years.

The Parwanoo Industries Association (PIA) has severally criticised this hike and has filed objections before the Himachal Pradesh Electricity Regulatory Commission (HPERC). The association said the government froze the tariff for only two years, though it has been claiming its credit during the investors’ meet to attract investors. The new electricity tariff has become applicable from April 1.

The commission has not increased the energy charges but increased the demand charges by Rs 20, 50, and 75 per kVA per month for medium, large and EHT, respectively. The impact of the same is expected to be about 5 to 15 paise per unit depending on the usage of power.

“The regulatory commission has the obligation to provide adequate budget to the HP State Electricity Board Limited (HPSEBL) under the Electricity Act, 2003. On the other hand, the power is largely surplus in the state and the average rate at which the power is sold across the country is around Rs 2.22 these days. Under these circumstances, it makes more sense to sell power within the state, which can easily fetch Rs 2.92 per unit to HPSEBL,” opined Rakesh Bansal, general secretary, PIA.

The investors said instead of introducing covert charges to hike the power tariff, the state government should contemplate subsidising the industry marginally so as to attract the new industries as well as retain the existing industry. Since the manufacturing sector was witnessing a poor growth rate, the advent of new industries was less and measures like hike in power tariff, despite claims to freeze tariff for five years, would dissuade the industry from investing in the state.

“The subsidy can be granted in two ways. The easiest would be to phase out electricity duty. Alternatively, the objective can be achieved by providing subsidy in a way that is being followed for the domestic category of consumers. There is a need of subsidy to an extent of Rs 0.25 to 0.50, in order to maintain the industrial growth in the state,” opined Bansal.

Source: tribuneindia