The Hindu Business Line : Industries oppose power tariff hike proposal

Mumbai March 23 Maharashtra's escalating power costs, not to speak of deteriorating quality of power, have got not only the common man but also industrial units deeply concerned.

Power tariff is sought to be raised year after year without commensurate improvement in services. As power is a critical input for industrial production, power costs and quality have a bearing on production costs and competitiveness of industries.

Aggrieved by the tardy performance of State-run power companies, industrial users and consumers' representative bodies are keen to challenge the tariff structure. Many including the Maharashtra Moffusil Mills Association (MMMA) have moved the Maharashtra Electricity Regulatory Commission (MERC) against the proposed power tariff of Maharashtra State Electricity Distribution Company (Mahavitaran).

T&D losses

One popular notion doing the rounds is that the State's power tariff is on the higher side in order to cover huge losses in transmission and distribution (T&D). It is only partly true. The complete truth is that apart from heavy T&D losses, Government undertakings are steeped in inefficiency, unjustified high cost of generation and general lack of commitment and vision to service consumers, according to MMMA.

There is now demand that the generation costs of Government undertakings should be benchmarked against well-run private sector companies such as Tata Power Company (TPC) so that the real picture is revealed, inefficiencies identified and rectified.

The feedstock for thermal generation comprises gas, fuel oil and coal. Although gas and fuel oil are priced higher, their calorific value is also high, unlike coal. If the price is adjusted for higher calorific value and heat rate (i.e. if all the three feed stocks are brought on a common denominator of calorific value and heat rate of coal), then there is a big variation in weighted average price.

Power generated out of coal as feedstock is seen cheaper by around 50 percent. Arguing that Mahavitaran uses only coal, representations have urged that Mahavitaran's tariff should be considerably lower than that of TPC; but the former's proposed tariff is the other way round (about 150 per cent higher).

MMMA has urged that Mahavitaran should achieve benchmark levels of generation and distribution over a period of time; and meanwhile, tariffs should not be raised, but the deficit may be made good by issue of bonds.

The entire procedure of publication of proposed tariff revision and inviting public comment too is seen as highly bureaucratic and designed to thwart public attempt to file objections, some have complained.