Cross-subsidy leading to 160% tariff for industries in AP

Our Bureau | | Updated on: Jan 30, 2013

Representatives from the industry today expressed concern about the severe power shortage, hike in power tariff and fuel surcharge adjustment (FSA) being levied by distribution companies.

They stated that the cross-subsidy is much more than the permissible limits working to about 160 per cent of the cost of service.

Devendra Surana, President, Federation of Andhra Pradesh Chamber of Commerce and Industries, met Botcha Satyanarayana, President, State Minister for Transport, to express industry and trade concerns about power shortage and its impact on their productivity.

While acknowledging the hardship faced by the industry due to power shortage and higher tariff and fuel surcharge, he said they have impacted the health of the industry.

He felt that there was need to increase generation and supply of power to help the industry, agriculture and the services sectors to come out of the slow-down and gain momentum.

The industry representatives stated that the tariff hike proposed would make them financially unviable, less competitive and may lead to sickness thereby job losses.

The Minister was explained the increase in tariffs was due to higher cross-subsidy proposed to be levied on industrial consumers.

They highlighted that according to the National Tariff Policy, the cross-subsidy should not be more than 20 per cent. With cross- subsidy, the proposed tariff for industrial consumers is 160 per cent of average cost of service.

With the cross-subsidy higher by 40 per cent and the additional burden, this is expected to result in lower growth of industry and also impact their ability to provide jobs.

The Minister, who is also the Pradesh Congress Committee Chief, assured that efforts would be made to rationalise the tariff.

Published on January 30, 2013
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