DVC tariff hike to impact West Bengal SMEs

Damodar Valley Corporation's (DVC) proposal for a sharp hike in power tariff for the current fiscal and the next two will impact SMEs - mainly the iron and steel sector of West Bengal.

"The Asansol-Durgapur belt is a hub of medium-sized iron and steel companies and the moderate DVC tariff helped the industry at difficult times. But with 50 per cent hike in proposed tariff it will definitely be a major blow to industry," Steel Rolling Mills Association officer Ramesh Jain said.

The iron and steel industry is under pressure due to the lower demand in the past few years due to slowdown. But just when demand had begun to pick up, any hike in input cost will put the industry in difficulty, he said.

DVC officials said 25 per cent of its revenue from power sales is from steel, coal and railways, while another 25 per cent from general industry.

Power utility Dishergarh Power Supply Corporation (DPSC) also buys bulk of its power for distribution from DVC.

"Any hike in power tariff by DVC will definitely impact our power cost to consumers," DPSC, Corporate Affairs President, Somesh Dasgupta said.

DVC in its multi-year tariff petition to West Bengal Electricity Regulatory Commission (WBERC) has demanded an average tariff of Rs 6.38 a unit for 2014-15, a jump of 51.5 per cent compared to the 2013-14 tariff of Rs 4.21 per unit, company sources said.

The tariff petition had been filed with the WBERC for three years, 2014-15, 2015-16 and 2016-17.

The DVC in its petition had sought Rs 7.10 a unit for 2015-16, a rise of 11.2 per cent over 2014-15. While, for the third year it had demanded a tariff of Rs 8.81 another 24 per cent rise over 2015-16.

If the terminal year 2016-17 tariff was compared with the last fiscal (2013-14) rate then it was more than 100 per cent rise in tariff for DVC's power consumers, they said.

The reasons cited by the PSU to justify its hike include increase in coal prices, proposed escalation of fixed cost of DVC generating stations and T&D system and phasing out of some old power plants during 2016-17.

Meanwhile, the DVC tariff for 2009-10 to 2013-14 has not yet been cleared by WBERC and provisional current billing rates were based on Central Electricity Regulatory Commission order.