The Uttar Pradesh unit of Federation of Chamber Of Commerce of India (FICCI) has written to Chief Minister Yogi Adityanath raising objections against the state government’s introduction of cross-subsidy charges on open access electricity consumers.

“Most of our members of FICCI have conveyed their deep concerns regarding cross subsidy charges being imposed on Open Access Consumers vide Electricity Tariff Order for the year 2020-21 from nil to ₹1.56 per unit,” Sharad Jaipuria, Chairman, FICCI UP State Council, has written in the letter.

“This steep hike in cross subsidy charges for industrial units during this unprecedented Covid-19 pandemic year 2020, which is still persisting, is highly uncalled for and is not conducive for industrial development as well as for investment-oriented sentiment generated so far by your good offices,” the letter continues.

Additionally, Confederation of Indian Textile Industry and PHD Chamber of Commerce in December wrote to the state’s Cabinet Minister of Industrial Development Satish Mahana flagging the cross-subsidy move.

Industrial growth

“The National Tariff Policy, 2016, clearly mandates that open access charges should not be so onerous that it kills competition. The basic idea behind promoting open access in Uttar Pradesh since new State government took charge in the year 2017 was that the consumers should be able to select amongst the most competitive of the available power companies instead of being forced to buy electricity from their existing electric utility,” the three trade bodies say in their letters.

“It is imperative to mention over here that though the consumers are purchasing power from other companies still all the transmission or distribution charges, wheeling charges, various other fees, point of interconnection charges, state transmission utility charges, etc are being paid to Uttar Pradesh Power Corporation Limited only which as a matter of fact are the third highest in the country in the range of ₹2-3.5 per unit,” the letters continue.

“It is worthwhile to mention over here that in the year 2018-19, the cross subsidy charges were ₹0.63 per unit,” the letters add. “However, to attract the investment in Uttar Pradesh and for promoting industrial growth and direct and indirect employment generation, the State government had removed the above cross subsidy charges with effect from April 2020 but now to have these charges reinstated is a regressive step and shall only escalate input costs besides eroding potential investor’s confidence.”