Small and micro units in Coimbatore have said the hike in electricity tariff will lead to price rise of all commodities and cripple industrial operation.
According to S. Surulivel, vice-president of Tamil Nadu Small and Tiny Industries Association, foundries have indicated that price of castings may increase by ₹6 a kg. It will result in almost 20% hike in cost of all the industrial products manufactured in Coimbatore. “This is going to lead to a lot of problems for industries in the State,” he said.
President of Coimbatore District Small Industries Association V. Thirugnanam said the association had sought hike in current consumption charges to be ₹6.75 a unit from the existing ₹6.35 a unit. The Tangedco suggested ₹7.50 and that has been accepted.
Similarly, the suggestions of the association for peak hour charges and demand charges were not accepted and this notified rates are not acceptable to MSMEs. Similarly, for high tension consumers, the association suggested ₹375 as fixed charges and the Tangedco initially proposed ₹600. It is now fixed at ₹550.
According to D. Vignesh, president of Southern India Engineering Manufacturers’ Association, for LT industries the industrial bodies had represented at various fora and the demand charge hike is not as high as anticipated. But, earlier there was just a single slab and now there are three slabs. There should be a single slab and the demand charges should be at ₹75 as most pumpset units fall in the category 50 to 112 KW. Peak hour for LT industries will affect the micro units.
For foundries, the demand charge is for connected load and the consumption is usually lower than the connected load. These industries are already hit by high raw material prices. Foundry industry will find it unviable with the revised tariff. The Tangedco should have a re-look at the demand charges, he said.
C. Sivakumar, president of Coimbatore and Tirupur District Micro and Cottage Entrepreneurs Association, said the energy consumption charges have been increased from ₹6.35 a unit to ₹7.50 a unit and fixed charges have been increased to ₹75 to ₹550 a kVA a month (for above 112 KW) as micro units come under LT III B.
“We in Coimbatore are getting pump and motors from Rajkot at a lesser cost. Foundries in Gujarat uses molasses and the labour cost and rent are lesser compared to Tamil Nadu. The hike in electricity charges in Tamil Nadu will result is several micro industries shutting shop,” he said. Introduction of peak hour charges for micro units could have been avoided. It is difficult to get workers who will work only between 10 a.m. and 6 p.m., he added.
According to J. James, president of Tamil Nadu Association of Cottage and Tiny Enterprises, bigger units may surrender the higher power demand they have taken. While the micro units cannot absorb the consumption charges, the peak hour charges introduced for these units will lead to closure of units. “The micro units area already paying ₹9 to ₹11 a unit and now they will have to pay ₹13 a unit or so,” he said.
Units that were shelling out ₹3000 or ₹4000 a month will have to pay ₹10,000 a month, which is not viable, he added.