Open access power will hit textile industry: CITI
Textile industry body CITI has expressed concern that opening up of the power market in India by implementing the proposed open access (OA) facility will seriously impact the country's textile industry.
"This decision would seriously impact several textile units who would have no option but to source power through open access method. With this change, the boards would no longer be under any obligation to supply power to such consumers," CITI said in a letter to the Ministry of Power.
Recently, the power ministry has given instructions to the State Regulatory Commission that all consumers who are consuming 1 megawatt (MW) or more power should be excluded from the category of consumers who can avail the tariffs set by the Regulatory Commission.
"Anybody who is considering more than 1 MW is not subject to the tariff obligation of the board. The decision tells that you will not get the normal tariffs which have been kept for the industry; it will not be applicable to you. You will be applicable for the market tariff," added CITI Secretary General D.K.Nair.
"All industries are consuming more than 1 MW," he pointed out.
Open access is a method that enables buyers to choose the source of electricity and also provide them right on the transmission and distribution system for transfer of power. Under the OA regime, bulk consumers enter into bilateral deals with discoms and stay outside the ambit of the regulated tariff system.
The CITI chief expressed concern that OA consumers may have to pay prices higher than the regulated tariffs, and as a result most of the textile companies will have to suffer. He viewed that instead of going for the proposed open access, the government should move to improve the existing system.
"You can take open access. We are not saying that open access should not be available. What we are saying is that we should not be thrown out of the administered system. When that is not enough, we will go to the open thing (open access method)," he said.
He stated that the industry is already facing acute power shortage.
States like Tamil Nadu and Andhra Pradesh which are among the largest textile producing hubs of India have been facing power shortages. In Tamil Nadu, industry is losing about Rs 300 crore a day due to the fall in production due to power holidays and other restrictions, and escalating costs due to the use of diesel generators.
"Already impacted by market shocks, the textiles and clothing industry would find it extremely difficult to face the 'double whammy' of this regulation by the government," the textile body mentioned in its letter to the Ministry of Power.