While the Union Government is planning to remove Cross-Subsidy charges levied on Large Power Consumers, Indian Steel Association has urged the Odisha Government to reduce Cross-Subsidy Surcharges.
In a move to offer major relief to Major Industrial and Commercial Consumers of Power, Minister Power R K Singh recently promised to look into issue of removal of Cross-Subsidy on large Power Consumers.
Mr.Singh had said that the Union Government is planning to amend the National Tariff Policy, which provides for a maximum 20 Percent Cross-Subsidy Charges.
While some states are charging as high as 100 Percent Cross-Subsidy surcharges, Government of India wants to do away with the Cross-subsidy Charges, Minister pointed out.
He advised the States to give direct benefit transfer to the targeted consumers, instead of levying Cross-Subsidy Surcharges on Major Power Consumers.
Union Minister has said that Union Ministry of Power will consult the State Governments on removal of Cross-Subsidy Charges.
Under this backdrop, Indian Steel Association (ISA) has requested the Odisha Government to consider their appeal to reduce Cross-Subsidy Charges.
ISA has pointed out that, Steel Industry in Odisha is facing daunting task as these industries are saddled with Cross-Subsidization on Open Access Transactions of electricity.
This is adversely affecting the Cost-Competitiveness of the Steel Makers in this Eastern State, pointed out ISA, sources said.
The Steel Association raised a point saying that at present, purchase of power from exchanges or even from other Group Companies attracts Cross- Subsidy Surcharge of about Rs.1.5 Kilo Watt Per Hour (KwH), which is very high.
This is almost equivalent to the fuel cost for producing power and such high Cross-Subsidy Surcharges are deterrent to open access transactions from Non Captive sources, ISA pointed out.
Now it is high time that the State Government is needed to rationalize the rate of Cross- Subsidy surcharge, as presently, open-access transactions of electricity are economically unviable for High Tension (HT) and Extra High Tension (EHT) Consumers, said ISA.
Under this backdrop, ISA has requested the State Government to consider to reduce the Cross-Subsidy Surcharges to 25 Paise on Power purchased in Odisha.
While such a relief will support Steel Industry to boost its production and generate more employment in the state, which is eyeing to raise its steel production to meet the target of 300 Million Ton of crude steel by 2030 in India.