Any revision of power tariff at the present juncture would push industries on the road to bankruptcy and the Tamil Nadu Electricity Boardwas trying to pass on the cost of its inefficiency to the consumers, the Coimbatore District Small Industries Association has said.
It wants the Tamil Nadu Electricity Regulatory Commission (TNERC) to direct the TNEB to come out with a plan that rescues not only the board but the also State from bankruptcy.
In a memorandum submitted to the TNERC, which held a public hearing on tariff revision in Coimbatore on Thursday, Mr M. Kandhaswami, President, Codissia, termed the justification to revise tariff as ‘neither comprehensive nor transparent'. He said the transmission and distribution losses stated by the TNEB are ‘untrue' and ‘no proper mechanism has been evolved by the TNEB to study the losses and reduce it.
Power tariff
He said that, “TNEB functions very inefficiently and the cost of such inefficiency is being passed on to the consumer.” There was “no justification for increase in power tariff” based on the actual cost of power procured by the TNEB from proper sources.
Mr Kandhaswami argued that power cuts and restrictions had increased the cost of power to industries eroding their cost competitiveness and warned that ‘further increase at this stage will only add to their burden which will make them unviable and halt industrial growth in the State.” It was the MSME sector that was the most vulnerable which already pays a “tariff higher than the cost to the TNEB”.
He said the argument being advanced by the TNEB for tariff hike was that it was suffering a loss of nearly Rs 14,496 crore per year and the tariff increase will reduce it by Rs 3,000 crore. But he said this “does not solve the problem faced by TNEB” as its losses would accumulate and the situation would get worse in the coming days.
Mr Kandhaswami feared that the tariff hike, instead of helping the TNEB to recoup its losses, was likely to “drag consumers, especially industries” along with it in its “road to bankruptcy by making them unviable”. In his memorandum to the TNERC, Mr M. Krishnan, President, Indian Chamber of Commerce and Industry (ICCI), Coimbatore, said the TANGEDCO has proposed a hike of 20 per cent for HT consumers and 40 per cent for LT consumers. He questioned the wisdom of making steep tariff increase at one go and pointed out that since electricity was an essential necessity, it should not be exploited “by pricing the power exorbitantly”.
‘Equal treatment'
He said there should be equal treatment of peak hour and night hour power consumption. The proposal to increase peak hours from the current level of six hours to eight hours is without any ‘justifiable reasons' and wanted TANGEDCO to be directed to make an analysis for the past two or three years to decide on it.
Mr Krishnan said there was a disparity between incentive and rebate and wanted both to be treated equally. In view of power supply not being made for six hours in a day besides the restriction during four hours in the evening, a proportionate reduction in demand charges should be made and the power factor incentive that was removed should be restored.
The ICCI President also termed as ‘not justified' levy of highest tariff for commercial consumers. He said any tariff should be based on the ability of the consumers to pay. The commercial tariff should be charged on ‘cost to serve basis' and they should not be ‘discriminated depending on the use of power'.