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HYDERABAD, Oct. 1

THE Andhra Pradesh Electricity Regulatory Commission (APERC) has approved fixing a separate tariff for ferro alloy units in the State as they have become unviable at the prevailing tariff rates.

In its order, APERC has held that "ferro alloys units be treated as an industry which needs to be provided with a lower than the normal tariff as the industry is considered as a category that does not have the paying capacity for the normal tariff, and classified as such".

The order comes in the wake of a joint petition by VBC Ferro Alloys Ltd, GMR Technologies and Industries Ltd, FACOR and Andhra Ferro Alloys Ltd. There are two more units, Navabharat Ferro Alloys and Jindal Ferro Alloys, located in the State.

APERC had directed supply of power to these industries at Rs 2.12 per unit, the rate at which units have confirmed that they would be viable. Besides, the Transmission Corporation of Andhra Pradesh (APTransco) and the power distribution companies in the State (DisComs) have confirmed that they would not incur any loss by supplying power at Rs 2.12 per unit.

APERC had pointed out that APTransco had confirmed availability of surplus power from out of the unallocated quota of 15 per cent from the Central generating stations and the expected additional generation from the second 500 MW unit of the National Thermal Power Corporation at Simhadri for the balance period of 2002-03 tariff year.

"APTransco, in fact, stated that power from the second unit of Simhadri will be available at 90 paise per unit during this period. APTransco/ DisComs have, therefore, stated that they would not incur any loss on account of supply of power at Rs 2.12", the Commission disclosed.

While approving the proposal for amendment of tariff, APERC, however, stated that lower tariff would be imposed subject to the condition that the ferro alloy units drew their entire requirement of power from DisComs only and maintain, on an annual basis, a load factor of 85 per cent.

In case the annual load factor was less than 85 per cent, the deemed consumption charges amounting to the shortfall shall be paid to the DisComs.

The order cited that since 1975, ferro alloys units have been the beneficiaries of concessional tariff for electricity under declared policies of the Central and State Governments and also the State Electricity Board.

Similar concessional tariffs have been extended by other States. Now, because of the increased tariff, the units have been closed causing revenue loss to the State besides creating unemployment.

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