In a notification published yesterday, Chhattisgarh (CG) state commission for power CSERC has proposed to increase the power tariff by almost 20%.
Chhattisgarh State Electricity Regulatory Commission (CSERC) has proposed to increase the basic tariff for FY17 from basic INR 4.25 per unit to INR 5.30 per unit. Demand charges will also increase from INR 360 to INR 375.
On the basis of capacity analysis, the estimated capacity of ferro alloys in Chhattisgarh is about 543.7 MVA. The estimated production works out to be about 594,972 mva pa on the basis of 65-70% capacity utilization. The proposed hike will increase the production cost of the ferro alloy industry in the state by INR 3,500-4,000/MT. This news of the proposed power tariff hike has come as a shock to the industry who would have to pay more for the power consumed in the “power surplus” state.
SteelMint assessed that the Chhattisgarh Govt. which claimed to have adopted the best industrial policy in the country for steel, could possibly throw the energy intensified ferro alloy industry in to dire straits. Looking ahead Chhattisgarh Ferro Alloy producers could be facing higher costs of production compared with their national and international counterparts, highlighting the loss of its traditional competitive advantage on the major cost component for the ferro alloy industry – power.
On a similar note, Mr. Manish Sarda, Director -Sarda Energy & Minerals Ltd and Vice-Chairman of The Indian Ferro Alloy Producers’ Association in conversation with SteelMint stated, “Higher power tariff will be detrimental to the growth of the power intensive industries like Steel and Ferro Alloys”. He further added, “One needs to be competitive in the international markets, and unyielding power tariffs at home could cripple the Chhattisgarh ferro alloy industry”.
The proposed hike in tariff would be the second hike in the last 2 years. In total, power tariff would hence increase by upto 45% in the last two years in Chhattisgarh
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