Thane Small Scale Industries Association (TSSIA) has cited high power tariff as a reason for a drop in industrial output and urged chief minister of Maharashtra State to review the charges and taxes levied for power consumption.
TSSIA has said that that power tariff in Maharashtra is nearly 40% higher than neighboring states like Andhra Pradesh, Gujarat and Karnataka. The association has written a letter to the CM asking him to cut power charges in Maharashtra to match the charges levied in other states. TSSIA has pointed out that industries in Thane have to shell out nearly Rs 9 per unit as against the average of Rs 4 levied as power charges in neighboring states. There are nearly 6,350 industrial power consumers in Thane belt. Of this 6,000 are low tension power consumers while the remaining are high tension power consumers.
Sujata Soparkar, vice-president, TSSIA explains that one of the reasons why industries are moving out of Maharashtra is the higher power cost. Also the higher power tariff will affect Maharashtra when it competes with other states on the “Make in India” theme”. Besides higher tariff, the industries are also upset with frequent disruption .
In response, MSEDCL [Maharashtra State Electricity Distribution Company Limited] has proposed a tariff cut for industrial and commercial users by 5% and 3% respectively. To balance this out, residents of Thane, Navi Mumbai and the eastern suburbs may soon have to pay more for power with a proposed 25-38% hike for domestic users.
The proposal, however, will first have to be approved by the Maharashtra Electricity Regulatory Commission, which will conduct a public hearing from March 18 to April 10 across the state.
I don’t think power tariff will be the only issue that makes Maharashtra industries less competitive than its peers outside the State.
To help solve the power tariff, the government needs to take a much broader view of power costs. Instead of burdening the common man, the government can look at the following options:
1. Push Energy Efficiency schemes in the industries; thereby decreasing the consumption of power.
2. Implement Open-Access in a way that it can be implemented easily and faster
3. Transmission and Wheeling charges for renewable energy should be decreased as much as possible. This will encourage industries to either set up their own power plants or buy cheaper power from renewable energy plants; on per unit basis; located across the State
4. In industry cluster areas, the government should investment for micro-grids
5. Promote solar rooftop
6. Promote green building for new industries and retro-fitting for existing buildings
The government can use a combination of less costlier debt and tax incentives to assist the industries implement / take advantage of the schemes which are not only environment friendly but also decrease use of energy and lower costs of power. This lower income [from taxes] for the government can be balanced with growth in complementary businesses in the state- renewable energy, energy efficiency technology and services.
Schemes such as rooftop solar, micro-grids and renewable energy plants transmitting power to industries can be implemented without any capex from industries. Investors can be invited by the State to supply power to these industries with land support, lower transmission and wheeling charges [quite high currently] and assist in easier implementation of open access projects [open access is on paper but seems very difficult to implement].
These steps will also help decrease the power cuts that we experience across the State.