Furnace industry faces the heat over retro charges

LUDHIANA: The

furnace industry

is riled at Punjab State Power Corporation Limited (PSPCL) and

Punjab State Electricity Regulatory Commission

(PSERC) over retrospective charges levied on consumers after PSERC announced hiked tariff in October.

Industrialists say the decision to levy hiked tariff from April 1, 2017 has imposed huge burden on them as every furnace unit will have to shell Rs 80 lakh each on account of retrospective charges. Businessmen urged the state government to roll back the decision at the earliest.

Since October 23, when PSERC announced hike in power tariff, members of all industry associations have been opposing levy of retrospective charges on the industry and other categories of consumers, claiming that the move would burden units already facing a crisis.

K K Garg

, president, Induction Furnace Association of North India (IFANI) said, “It has become a common practice by PSERC to announced electricity tariff for the current year in October or November and then implement it retrospectively from April 1. This decision is very harmful for the steel furnace industry, as this year alone, every furnace unit will have to incur losses from which it will be difficult to recover. With this retrospective effect, every member of our association will have to pay extra bills to the tune of several lakhs,” he said.

Garg pointed out that the furnace industry has been incurring losses with almost 50% of units shut down due to non-viability and the tariff order issued by PSERC, with increase of close to 10% comes as a blow.

Dev Gupta

, general secretary, IFANI said, “It is very clear in the electricity act 2003, that PSERC must declare new tariff rates before April 1. They have to complete all processes of tariff order on time. But unfortunately, PSERC always fails to declare tariff on time and as a result, we are made to pay retrospective charges every year. The retrospective effect will result in extra burden of around Rs 650 crore on steel furnace consumers. Ludhiana’s small induction furnace units will have to pay extra Rs 80 lakh each while large scale units and arc furnaces will have to shell out Rs 3 to Rs 5 crore each.”

Gupta said such steps would destroy the furnace industry in Punjab. “Our association has met the power minister and finance minister and urged them to save Punjab’s steel manufacturers, particularly furnace industries, which have been facing a huge crises for the last decade. Once again, we request the state government to understand the gravity of the situation and roll back retrospective charges levied on us due to fault of departments,” he said.