The 30 per cent hike in power tariff announced recently by the Orissa Electricity Regulatory Commission (OERC) has drawn flak from the industry leaders in the state.
They stated that the move to revise the power tariff upwards will hit the operations of the industries, especially the power intensive ones and is also likely to dent Orissa's competitive edge as an attractive investment destination.
“The uninterrupted supply of power coupled with the reasonable power tariff have been instrumental in positioning Orissa as an attractive investment destination. But the imposition of a power holiday on the industries and hike in power tariff are likely to take that competitive edge away from the state”, R K Jena, chairman, CII's Orissa State Council and managing director, Balasore Alloys Ltd told Business Standard. “While the hike was inevitable as there was no revision in power tariff for the past nine years, the industries did not expect it to be so steep. Besides, the hike has been effected at a time when the industries had just started recovering after grappling with the economic meltdown”, he added. The hike in power tariff announced by OERC on Saturday will be effective from April 1, 2010. Under the new tariff order, the EHT (Extra High Tension) industrial consumers will have to pay Rs 3.90 per unit compared to Rs three per unit at present.
Jena said that even after the revised tariff, the cost of power in Orissa would still be lower compared to that in northern and western India where the power tariff ranges from Rs 5-6 per unit. He, however, pointed out northern and western India are not favourable destinations for the power intensive industries unlike Orissa. The increase in power tariff would seriously impact the ferro alloys units where the average power cost forms around 40 per cent of the variable cost of operations of these units, he stated.
Asked on CII's action plan, Jena said, “CII-Orissa will soon have a meeting to decide on the issue. We have thought of approaching the OERC and the Orissa government on the issue”.
Bjoy K Sahoo president, Confederation of Information Technology Enterprises (CITE)-Orissa said, “The hike in power tariff is an area of concern but what is of greater concern is the issue of interruptions in power supply to the IT units. Due to the imposition of power holiday by the state government, the IT units have to run diesel powered generators and incur twice the cost.”
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As per the new tariff order, the tariff at which Gridco supplies power to the distribution utilities has been raised from Rs 1.22 per unit to Rs 1.60 per unit.
The bulk power supply tariff has been fixed at Rs 1.57 per unit for Central Electricity Supply Utility of Orissa Limited (Cesu), Rs 1.94 paisa per united for Western Electricity Supply Utility of Orissa Limited (Wesco), Rs 1.95 paisa per unit for Northern Orissa Electricity Supply Utility of Orissa Limited (Nesco) and 90 paise per unit for Southern Orissa Electricity Supply Utility of Orissa Limited (Southco).
The retail power tariff for the domestic power consumers has been kept unaltered at Rs 1.40 paise per unit for the first 100 units of electricity consumed. However, for the next two slabs- 200 units and 300 units, the tariff has been increased by 80 paise and one rupee respectively. This means that for electricity consumption beyond the first 100 units, the consumers have to pay Rs 3.10 as against the existing Rs 2.30 while for power consumption beyond 200 units, the consumers need to pay Rs 4.10 compared to Rs 3.10 which they are paying at the moment. The agriculture sector has been spared the hike andthe rate has been kept unchanged at Rs 1.10 per unit.