Forging units seek minimum demand charges, banking facility from TANGEDCO

G Balachandar Updated on May 15, 2020
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Hundreds of forging factories and other manufacturing units in Tamil Nadu face the threat of a financial blow in the area of power cost as they await the exemption of power utility, and support like in other States.

These units are facing the issue of maximum demand charges and banking of April’s solar generation units.

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Industries with HT power supply have requested the respective State governments across India not to charge maximum demand (MD) as per standard rule for the lockdown period.

While some States have given relief to the HT consumers, TANGEDCO’s stand causes worry to the HT units.

TANGEDCO has raised April bills to HT industries with 90 per cent MD charges despite the Tamilnadu Energy Regulatory Commission’s suo moto order for levying minimum charges for the lockdown period.

Revision of April bill

It is learnt that most of the HT industries were prevented from using power up to the sanctioned demand, except some under the exmepted categories.

Hence, the industries pointed out that it will not be possible for the HT units to pay the 90 per cent MD charges, which is totally in violation of TNERC proceedings.

The industries have requested the State government to intervene and direct power authorities to revise the April HT bill. All the industries have paid the March bill fully even though the lockdown was effective from March 25.

“The Punjab government has waived the charges completely. Maharashtra has also done it. The Karnataka government have waived the charges for all MSMEs, while big units were given exemptions,” S Muralishankar, President, Association of Indian Forging Industry (AIFI), told BusinessLine.

For an HT forging unit that consumes 8-9 MW of power, the fixed power charges alone will be about ₹45 lakh for this lockdown month. Companies term this as a big amount at a time the business was completely down.

RE generation

The industries have also sought the State government’s support in the area of renewable energy generation. Many forging industries have set up captive solar PV units and have agreements with TANGEDCO. Under the deal, generated renewable power is fed into TANGEDCO’s grid and equivalent units are adjusted in respective HT billings.

But in April, forging factories were closed due to lockdown and there was no consumption of power. However, the captive solar plants continued to generate power and the same was fed to the grid.

In this regard, the Union Ministry of New & Renewable Energy has advised State distribution companies to allow banking of the generated units during the lockdown period so that the industries can use banked energy during the financial year.

While there is no clear stand from TANGEDCO on this, industries request banking support of unadjusted solar units so that it can be adjusted during this fiscal once the production pick up.

“Since the manufacturing industries are already going through a major crisis due to the lockdown, high MD charges and the absence of banking support will deal a big financial blow to us,” said a top official of a leading forging unit.

Published on May 15, 2020
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