Concerned over industrial units moving out of its electric grids, the state government has decided to enact a legislation regulating large users from buying cheaper power from the open market. The move is likely to spark a controversy since it also envisages imposing a heavy duty on industries that choose to abandon the government grid and move to an Open Access mechanism.
Under the Electricity Act, 2003 the Open Access system allows large users of power, typically with a load of 1 MW and above, to buy cheaper power from the open market.
Minister for Energy Chandrashekhar Bawankule said the Maharashtra government is likely to incur losses of about Rs. 5,000 crore following the decision of as many as 500 major industries to move out of the state-run Maharashtra State Electricity Distribution Company (Mahavitaran) grid ( The Hindu , June 22). The new law will look to impose a cess or electricity duty as penalty to discourage the movement of units.
Since 2012, companies such as CEAT, Mahindra, Raymonds, Tata Motors, Godrej, among others have moved to private players like Mittal Processors and Global Energy Ltd because of high power tariffs charged by MahaVitaran. “There is some truth in the fact that 500 industries have abandoned our grids, resulting in losses to the tune of Rs. 5,000 crore. We are planning to recover this amount in the form of a duty imposed under a proposed legislation to be introduced in the monsoon session,” said Mr. Bawankule.
The movement of industries came to light in a proposal submitted by MahaVitaran to Maharashtra Electricity Regulatory Commission proposing an increase in the existing power tariff of industrial, residential and farming consumers, ranging from 19 per cent to 27 per cent, in the next four years ending 2019-2020. “Most consumers have opted for open grid access since 2012 since the state sells power at Rs. 8 per unit whereas in the open access system, the tariff ranges from Rs. 5.5 to Rs. 6 per unit,” said activist Pratap Hogade, convenor, Veej Grahak Sanghatana which has done an independent analysis of the industrial consumer exodus from the state. Of the 1,800 consumers who use 1 MW, the study finds that 500 have already abandoned MahaVitaran over the past two years.
Mr. Bawankule said the state has surplus power of about 5,500 MW since it generates 17,500 MW as opposed to the demand of 12,000 MW, and could at some point consider sending the additional stock for use in the open access network.
500 industries have abandoned our grids, resulting in losses
to the tune of
Rs. 5,000 croreChandrashekhar BawankuleEnergy Minister
