Power Cut: Textiles, Foundries in Tamil Nadu worst hit

Power cut: textiles, foundries in Tamil Nadu worst hit

R Yegya Narayanan
D Balasundaram, President, Tamil Nadu Electricity Consumers’ Association
D Balasundaram, President, Tamil Nadu Electricity Consumers’ Association
Cost of production to increase by 3-4 per cent
The announcement of a 20 per cent power cut during non-peak hours by Tangedco has come as a shocker to industries.
What has come as a twin blow is the proposal by the TNERC to increase the power tariff. The power cut would push up power costs for industries as diesel prices have steadily been on the rise. Addressing an election meeting here, Chief Minister J Jayalalithaa had pointed out that the daily power supply in Tamil Nadu during the current year had gone up to an average of 267 million units as against 208 million units during the previous DMK regime.
She said that because of the positive measures taken up by the State Government, power cuts introduced by the DMK Government had been ‘completely removed’ from June 1, 2014. She said that in the 106 days since then, the State was given power supply without interruption for 97 days.
Explaining to BusinessLine the impact of the decisions, D Balasundaram, President of Tamil Nadu Electricity Consumers’ Association (TECA), Coimbatore, said different class of consumers would be affected differently. He said for HT consumers, for whom the effective power cost is ₹7.20/unit now, the increase would work out to about ₹1.90 to ₹2 per unit of power.
For power intensive industries like textile and foundries that abound in the region, the increase would push up the cost of production by 3-4 per cent. He said Tangedco has imposed peak hour restriction (6 p.m. to 10 p.m.) on HT industries and commercial consumers under which they could use only 10 per cent of the demand and energy quota. There would be a 20 per cent cut on demand and energy during the rest of the day .The Industries, particularly HT consumers, have to factor in the time taken for switching off/starting furnaces etc. that would push up the power cut by another hour. Hence, for nearly one-third of the day, the industries would have to go without regular grid supply, leading to a 30-35 per cent loss in production.
Captive power
Balasundaram said captive power was not an option for all power-intensive industries because of the generation cost of ₹15 per unit. He said industries also found sourcing of power from other sources unattractive as Tangedco charged ₹3.60/unit of power that made the third party power prohibitively costly.
He feared that the sudden development on the power front would impact any expansion plans of the industries. It is also possible that industries might look for other regions for fresh investment.
(This article was published on September 24, 2014)