Uttaranchal steel sector slams new tariff order

The steel industry in the hill state is peeved at the new tariff order announced recently by the Uttaranchal Electricity Regulatory Commission (UERC) and has sought parity in tariff rates with those in the high tension (HT) industry.

The mandarins of the industry alleged that the UERC has actually imposed a 50 per cent hike in tariff on their units and demanded that the tariff be brought down from Rs 3.52 per unit to Rs 2.32 per unit. They also wanted to know UERC's logic behind bracketing them into Power Intensive Unit (PIU) category.

For this, a high level delegation of the steel industry would soon meet top government officials as well as Chief Minister N D Tiwari saying that the new order might sound the death-knell for the Rs 1,000-crore steel industry in the state.

Stating that the state government had proposed that tariff for steel units and other PIUs be brought down and made equal to that for high tension industries, UERC Chairman Divakar Dev at a press conference had said that effective tariff for steel units had been made equal to the effective tariff for HT industries.

The steel industrialists claimed that between 2000 and 2004, the steel industry used to come under the HT industry. It was in September 2004, that the steel industry was put in PIU category by the UERC, which also increased the tariff rates by 58 per cent.

In 2006-07, though the assertion of the Uttaranchal Power Corporation Limited was that the steel industry would consume only 326.75 million unit of power, the UERC claimed that the consumption would be 2,447.89 million units, said Jai Bhagwan Agarwal, a spokesman of the Kumaon Steel Manufactures Association.

This resulted in hike in power tariffs on steel units by 50 per cent, said Agarwal.

When contacted, Principal Secretary, power, N Ravi Shanker said the government has recommended to the UERC that the power tariffs on PIUs be brought at par with HT industry.

"I believe that our recommendations have been broadly accepted by the UERC," said Ravi Shanker.

However, top government officials said the steel industry was free to move the appellate tribunal to seek relief from the UERC.