KCCI Files Objections on MESCOM Application before KERC for Revision of Power Tariff for 2020-21

KCCI Files Objections on MESCOM Application before KERC for Revision of Power Tariff for 2020-21

 Mangaluru: As per statement made by Isaac Vas, the President of Kanara Chamber of commerce and Industry (KCCI) , “The KCCI filed Objections against the MESCOM application before the Karnataka Electricity Regulatory Commission for revision of Power Tariff for the year 2020-21 were gracefully heard by the Hon’ble Commission during the Public Hearing held at the D. C’s Office Hall today, 13-02-2020 from 11.00 a. m. onwards. We look forward to hearing favourable Orders from the Hon’ble KERC. The following are the objections made by KCCI”

1. REDUCTION OF LT 5 TARIFF FOR SMALL INDUSTRIES :

Mescom has demanded tariff revision at a time the total demand from Industrial sector is coming down. Industrial power consumption is showing a decreasing trend year after year which proves the Industrial Slowdown. We are turning into consuming economy from producing economy and imported goods are filling our homes because of our inability to produce. Mescom being a facilitating agency must take initiative to turn this tide and take measures to increase Industrial consumption.

Demanding increased tariff is definitely not a way to stop the tide of imports. It must ensure quality power at competitive rates to increase demand from Industry and act as a catalyst to employment generation which is the primary need of the hour for the country. Above all reducing trend of Industrial consumption both LT and HT compared to domestic, commercial and Irrigation signals alarming trend of declining Industrial production and turning ourselves into import economy. This is not in tune with the MAKE IN INDIA , but also leave an adverse employment scenario in a country majority being employable age.

Small Scale Industries have been undergoing severe hardship on account of global recession, Demonetization, reduced sales and the recessionary conditions prevailing in the domestic market for the last Two years. Increase in electricity tariffs will hit Micro, Small and Medium Enterprises (MSME) under LT 5 Category as the move will increase cost of production and kill competitiveness Any further burden in terms of increased power tariffs on them will be completely counter-productive and lead to closure of many units and loss of jobs. As such the share of industries consumption in the total power consumption in the State from the grid has gone down steeply over the years

The annual growth of demand for Power under LT5a Category also nil and will be negative in the coming years. The Cumulative growth CAGR also negative in this category. KERC should direct MESCOM to manage their affairs better by reducing distribution losses, improving efficiency of delivery and increasing productivity instead of burdening industry year after year, particularly the SMEs, which are in no position to pass on the increased costs.

Mescom in its reply dated 3rd February 2020(4.0) argued that increase in Power tariff is not the sole reason thereby agrees that its at least one of the reason. All other reasons are being taken care of by respective govt departments by announcing incentives and concessions in taxation,reduced GST tariff etc., We are now demanding MESCOM also to contribute by announcing decrease in tariff as demanded by us. We therefore request hon’ble KERC to direct MESCOM to reduce tariff be Re.1 per unit.

2. INCREASE OF POWER LOAD FOR LT CONSUMERS:

At present Power sanction of 67 and above are classified under LT category. However the maximum power load under LT category in the neighboring Kerala State,Tamilnadu,MP etc., has been 100 H.P. In Maharastra & Delhi its 150 HP. In this connection we bring it to your kind notice towards the Annual performance review of Mescom for earlier years under LT 5 and HT 2a category where in it is reported a shortfall of consumption and consistent decreasing trend in installations which has affected the profitability of Mescom.

In this connection we had written to Government of Karnataka who have redirected our request to KERC to take a decision in this regard. We therefore suggest you to increase the Load to 150 hp for further installations and not to put penalty for drawing load till 100 HP for existing installations. This will benefit the growth of Small Scale Industries thereby increasing the Profitability of Mescom. Mescom Also promised to follow KERC Guidelines in this regard..

3. EASE OF DOING BUSINESS NORMS :

Mescom is not following ease of doing business norms for the sanction of Power as directed by Chief Secretary , Ministry of Power vide EV76VSC2015 Dt. 19/12/2015 in letter and spirit and prospective Entrepreneurs are made to run to and from Every section of Mescom, This will unnecessarily delays the project implementation which leads to adverse opinions of business environment in the state. I request Hon’ble KERC to direct MESCOM to publish booklet on ease of doing business norms as done by KPTCL..

4. FIXED CHARGES ON MONTHLY BASIS SHOULD BE DISCONTINUED

As hon’ble commission aware that while applying for a certain KW power based on power allotted the consumer is supposed to pay every month Minimum Charges for number KW sanctioned to them.

Recently there has been a sharp increase in monthly fixed charges rather than through rates based on usage. However,higher fixed charges are an inequitable and inefficient means to address utility concerns.Customers who use less energy than average will experience the greatest percentage jump in their electric bills when the fixed charge is raised,since bills are based less on usage and more on a fixed fees structure.

It is not fair to charge fixed charges every month to consumer. Based on the power allotted they can charge One time charge , but charging minimum charges on permanent basis is not fair. We request hon’ble commission to consider our request in the interest of low usage and low income consumers.

5. TIME OF DAY TARIFF (T.O.D. TARIFF):

We have been demanding to the Honorable Commission for changing the TOD Tariff Schedule timings considering the fact that the Industries who works on late night shifts have to undergo Production waste, extra labour payments and other uncertainties during non peak hours.

The above tariff and timings has been suggested after considering the additional cost the industries bear due to overtime charges, extra incentives on labour, transportation, stay and food of workers who are opting for the Late night and early morning Shifts

TIME OF DAY Reduction in energy charges

20.00 hrs to 8.00 hours (-) Rs. 1.25 paise per unit

8.00 hrs to 20.00 hrs Normal Tariff

Mescom in its reply stated that object of TOD tariff is to disincentivise during peak hours. It’s a fact that Mescom is unable to sell its power during peak seasons because of excess generation of Solar power hence decrese in demand. They should properly study the current trend. We are sure that this will not only encourage utilization of Power during non peak periods but will increase the revenue of Mescom. We also request you to extend the special incentive scheme offered to HT category for LT 5 consumers also

6. INCREASE OF POWER LOAD FOR LT CONSUMERS:

At present Power sanction of 67 and above are classified under LT category. However the maximum power load under LT category in the neighboring Kerala State,Tamilnadu,MP etc., has been 100 H.P. In Maharastra & Delhi its 150 HP.

In this connection we bring it to your kind notice towards the Annual performance review of Mescom for earlier years under LT 5 and HT 2a category where in it is reported a shortfall of consumption and consistent decreasing trend in installations which has affected the profitability of Mescom. In this connection we had written to Government of Karnataka who have redirected our request to KERC to take a decision in this regard. The copies of Correspondences have been attached herewith..

We therefore suggest you to increase the Load to 150 hp for further installations and not to put penalty for drawing load till 150 HP for existing installations. This will benefit the growth of Small Scale Industries thereby increasing the Profitability of Mescom. In this connection we bring it to the kind notice of Hon’ble Commission that current state of the economy is in decreasing trend. Everything like Income tax,GST,Employment, Industrial Production, Bank Interest is decreasing then Why should Mescom wants increase in Power Tariff..

In the above circumstances We urge the Honorable Commission to protect the interests of the consumers by providing electricity at affordable costs to consumers by rejecting the Tariff revision proposal and Kindly reduce the tariff for LT5 Category by Re.1 per unit to enable them to work efficiently. We are confident that by their excellent and able administration they will make MESCOM a profitable company.

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