For industrial units – especially small and medium enterprises – who are faced with bleak power situations that hurt their efficiency, here is a model of how power woes can be addressed.
Many SMEs in the Faridabad region, who are members of the Faridabad Small Industries Association (FSIA), are joining hands and eyeing an arrangement for collective power purchase from a private electricity distribution company.
FSIA members said this could be the country’s first example of a SME cluster buying power from a private electricity distributor.
Rajiv Chawla, president of the FSIA, explained that units with power requirements of one Mw or more have the option of going in for the open access system. However, SMEs with electricity connections of less than one Mw are unable to do so individually. Hence, FSIA has persuaded those of its members with power requirements of less than one Mw to come together, and is exploring an opportunity to tie up with a private sector electricity distribution licensee company for assured round-the-clock power to these members.
FSIA has already identified a private electricity distributor and Chawla said the agreement may be signed as early as next week. The power situation in Haryana is dismal, with industrialists complaining that they faced power cuts of 12-17 hours in a day. With improvements unlikely in the near future, they said, they decided to change their power procurement strategy. They fear that if they continue running their DG sets, the costs of production will continue to be high, thus making them less competitive and eventually forcing them out of business.
Once the agreement is signed, industrial units in Faridabad can have a reliable supply of power by availing themselves of open access from the Dakshin Haryana Bijli Vitran Nigam (DHBVN) distribution network. FSIA has already has asked its members to jointly form a special purpose vehicle and apply to the Haryana government or DHBVN, for the handing over of a distribution feeder to such consumer groups.
However, before seeking permission from the regulatory authorities, FSIA is conducting a pilot project, which will enable the group to identify a feeder supplier located in the vicinity. The consent of the majority will be taken prior to entering into a contract with a distribution company for electricity supply.
Also, FSIA is trying to identify SMEs with power requirements of 500-1,000 Kw, so that their requirements can be clubbed and a separate distribution line can be laid for them.
The agreement is envisaged to be a contract for up to two years at fixed rates, under which the licensee company will be obliged to supply uninterrupted power. The actual tariff applicable to industries would be available only after a detailed technical study is conducted.
