FPJ Exclusive: MIDC mulls foray into electricity distribution, hopes to supply electricity at competitive rates

Mumbai: The State-run Maharashtra Industrial Development Corporation (MIDC), which is a nodal agency for industrial development and manages 289 industrial estates, may turn electricity distributor in due course of time.

Minister of Industries Subhash Desai has made a strong case for MIDC foray into electricity distribution in a bid to provide electricity at competitive rates to industries.

Desai told FPJ, ‘‘Electricity rates charged to industrial consumers by the Maharashtra State Electricity Distribution Company (MahaVitaran) is on an average higher by Rs 3 per unit, compared to that in Gujarat, Karnataka, Andhra Pradesh and Telangana.

MIDC can purchase bulk power from MahaVitaran and can distribute it in the industrial estates at a lower rate, compared to the present rates charged by MahaVitaran.’’

He informed that he has asked MIDC to prepare a detailed report by a consultant and then the government will take a final decision. Thereafter, MIDC will seek license from the state electricity regulatory commission which is mandatory under the Electricity Act, 2003.

Currently, of the total 2.54 crore consumers, MahaVitaran supplies power to 3.90 lakh industry consumers.

For high tension industry consumers, the tariff in Maharashtra ranges between Rs 8.85 per unit and Rs 9.48 per unit, as against Rs 7.60 to Rs 7.90 per unit in Karnataka; Rs 5.40 to Rs 6.45 per unit in Gujarat; Rs 8.10 to 8.80 per unit in Madhya Pradesh; Rs 7.55 to 7.65 per unit in Chhattisgarh; and Rs 7.90 to Rs 8.40 per unit in Telangana.

Similarly, the low tension industry consumers in the state are charged for power at Rs 10.44 per unit, as against Rs 7.78 to Rs 8.67 per unit in Karnataka; Rs 6.25 to Rs 7 per unit in Gujarat; Rs 8 to Rs 9 per unit in Madhya Pradesh; Rs 6.80 to Rs 7.95 per unit in Telangana.

Desai strongly feels that power availability at competitive rates will help industries to continue their operations and also expand in Maharashtra by competing with their counterparts in other states.

He further stated the competitive electricity rates will also help attract new investments in the state which enjoys pre-eminence in attracting domestic and foreign direct investments.

Industry and consumer bodies, including the Maharashtra Chamber of Commerce, the Industry and Agriculture (MACCIA) and the State Coordination Committee of Electricity Consumers have been repeatedly pressing for reduction in electricity tariff for industries.

Currently, industrial consumers bear additional power cost which helps the MahaVitaran provide power to agriculture and power looms at subsidized rates.

Maharashtra government provides subsidy to MahaVitaran ranging between Rs 3,500 crore and Rs 7,000 crore in its annual budget. In addition, the state government provides Rs 1,000 crore to MahaVitaran for lower tariff to be charged to industry consumers, especially in the underdeveloped Vidarbha and Marathwada regions.

The Maharashtra Chamber of Commerce, Industry and Agriculture President Santosh Mandlecha argued that electricity rates charged to industries will have to be lowered at the earliest.

‘’If MIDC plans to foray into the electricity distribution it is a welcome move. However, MIDC, instead of focusing on earning profit, should provide much needed relief to industry consumers by supplying electricity at competitive rates compared to that in neighbouring states,’’ he noted.

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