Chhattisgarh Steel Plants Shut Down Over Power Tariff Hike

Raipur, Jul 30 (PTI) Nearly 200 `mini steel plants' in Chhattisgarh have stopped operations indefinitely since Monday night to protest against the recent hike in power tariff.

An industry representative claimed that running these plants is not possible with the increased electricity cost, while an official of the Chhattisgarh State Power Distribution Company Ltd (CSPDCL) defended the hike stating that it was insignificant in view of inflation.

The closure of mini steel plants which produce raw materials including TMT bars and steel rods is expected to affect more than two lakh workers and their families and also have an impact on the prices of construction materials.

"The protest will continue until the state government addresses the issue," general secretary of the Chhattisgarh Mini Steel Plant Association Manish Dhuppad said on Tuesday.

The association has written to Chief Minister Vishnu Deo Sai and also met his cabinet colleagues and senior government officials seeking relief from the tariff hike, he told reporters.

The association did not intend to stage a protest but the hike made running small-scale steel plants unfeasible, compelling the owners to halt the operations, Dhuppad said.

If no solution was found, these units will permanently close down in the next couple of months owing to financial losses, he said.

The Chhattisgarh State Electricity Regulatory Commission (CSERC) last month announced an average hike of 8.35 per cent in tariff for all categories of consumers with effect from June 1.

Instead of Rs 6.10 per unit, steel plants will have to pay Rs 7.60 per unit, Dhuppad said.

Between 2003 and 2018, the tariff was around Rs 4.50 per unit which helped attract industrialists from other states. But since 2018, the power tariff has been consistently rising, making it difficult for mini steel plants to survive, he claimed.

Apart from the tariff, 8 percent electricity duty, around 10 to 15 percent FPPAS (Fuel and Power Purchase Adjustment Surcharge) and 0.10 paise cess add to the bill, Dhuppad added.

The mini steel plant (furnace) industry consumes about 1,300 units of electricity per tonne which cost around Rs 8,000 per tonne, but after the hike, the cost of electricity rose to around Rs 10,000 per tonne, he said.

Dhuppad also claimed that power tariffs in the neighbouring states were lower.

The association has demanded Rs 1.40 per unit subsidy (in power tariff) for five years and exemption from electricity duty for 15 years, Dhuppad said.

An official of the Chhattisgarh State Power Distribution Company Limited, however, claimed that the hike was nominal, compared to the inflation over the last eight years.

The CSERC has increased energy charges for the high voltage steel industry by only 25 paise (4.10 percent) at Rs 6.35 per unit from the earlier Rs 6.10. The rebate on load factor was reduced from 25 percent to 10 percent so that consumers in other categories with socio-economical priority would not have to bear the burden, the official added.

High voltage steel plants are given a rebate of Rs 713 crore through the rebate on load factor in the tariff which is not offered to any other category of consumers, he said.

The energy charge was Rs 6 per unit in 2017-18 for the steel industry which has increased to Rs 6.35 per unit, while it was Rs 8.36 in Maharashtra, Rs 8.10 in Telangana and Rs 7.15 in Madhya Pradesh, the official claimed.