FAPCCI seeks exclusive power distribution company for industry

Published: 21st February 2013 10:50 AM  |   Last Updated: 21st February 2013 10:50 AM   |  A+A-

To bail themselves out of the on-going power crisis, members of the trade body FAPCCI on Wednesday urged the state government to set up an exclusive power distribution company to meet their power requirements.

The move comes at a time when the government has proposed a hike in power tariff effective April, subject to clearance from the AP Electricity Regulation Commission.  As per the proposed price of Rs 7.19 per unit, AP will be ranked seventh on the High Tension industrial tariff in the country.

Revenue projection from the new tariff proposal is slated to be about Rs 31,035 crore from industrial and commercial customers, while the cost of service is likely to be about Rs 21,306 crore. According to Devendra Surana, chairman of FAPCCI and managing director of Bhagyanagar India Ltd, this will effectively translate to a cross subsidy of Rs 9,728.12 crore. On the other hand, the total cost of power supplied to agriculture and other subsidised sectors stands at approximately Rs 14,867 crore, with an approved subsidy of Rs 5,884.37 crore.

As per the National Tariff Policy, the subsidy burden should be a maximum of 20 per cent over the cost of service. “But the new tariff proposals on an average puts the cross subsidy of about 60 per cent for HT category of industries,” said Shiv Kumar Rungta, MD, Rungta Glasstech.

As per estimates, nearly 12,000 industries including big, medium and small have been affected owing to shortage of power. Together, the industry employs 1.5-2 lakh people in the state.

Power deficit in March is expected to be 2,907 million units with demand likely to be about 10,1410 million units.

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