“DISCOMS’ projections are unrealistic”

Investors’ community is in a state of shock over the Annual Revenue Requirement proposals made by four DISCOMS seeking another round of hefty increase in power tariff.

For APEDCL alone, the hike proposed is to the tune of Rs.1800 crore leaving a deficit of Rs.815 crore.

The DISCOM in its ARR promised to meet the deficit reducing transmission and distribution losses.

Strongly opposing the proposed hike, industrialists say that the State is already bogged down with slow growth due to variety of reasons including the bifurcation issue and if the hike is effected it will lead to flight of investments to other States.

Investors say industrial and commercial consumers in APEPDCL provide a cross subsidy to the tune of Rs.1731 crore which amounts to 45 per cent of the actual cost of supply.

CII Vizag zone chairman G. Sambasiva Rao said DISCOMS’ projection of deficit were unrealistic and said the industrialists were not in a position to stomach anymore hike. Ferroalloys units are already facing the heat. “CII members are totally opposed to the proposals,” Mr. Rao told The Hindu.

Commenting on proposals made by DISCOMS, FAPCCI representative T. Sujatha said in a submission to APERC that it is proposed to increase energy charges by 16 per cent and again demand charges by 200 per cent from Rs.50 per KW to Rs.150 per KvA.

“It is seen that industrial tariffs increased by more than 200 per cent while wholesale price index (WPI) of fuel and power has increased only by 49 per cent in the last four years, so there is no rationale for such steep increase in energy charges of industrial consumers,” she said.

Industrial consumers account for 30 per cent of the total energy sales of AP distribution utilities and contribute about 45 per cent of total revenue from tariffs.

“Till four years back AP had the lowest industrial tariffs and with the proposed tariffs of the petitioners (DISCOMS) AP becomes a State with one of the highest industrial tariffs,” she said. She also blamed the failure of DISCOMS to ensure tariff rationalisation by fixing tariff at 20 per cent above the cost of supply by 2010-11 as per National Tariff Policy.

Deadly blow

Visakha Autonagar Small Scale Industrialists’ Welfare Association president Ramakrishna Narapareddy said unlike other States, they were not demanding reduction in tariff. “If the existing tariff is enhanced, it would deal a deadly blow to MSME forcing many of them to shutdown their units,” he said.

Software units in the city are also fuming with rage. Advocating separate tariff by DISCOMs based on their individual performance, Rushikonda IT Park Association vice-president O. Naresh Kumar said despite non-supply of gas, consumers were being forced to pay entire operational cost and loans of all gas-based power plants like GVK, Konaseema and Reliance as per Power Purchase Agreements.”

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