The textile industry of Southern India are demanding a separate tariff or load factor incentive as the textile industry is the highest consumer of TANGEDCO and thus deserves to have a special treatment and concession.
The textile industry runs round-the-clock throughout year and consumes 900-950 units of power for one hour for every MW thus enabling TANGEDCO to make substantial profit when compared to any other consumer.
The new power tariff would seriously affect the competitiveness of the textile mills in Tamil Nadu across the value chain.
According to T Rajkumar, chairman, Southern India Mills' Association (SIMA), the proposed hike in energy charges, demand charges and other rates would work out to around Re. 1 per unit and would increase the yarn costs by Rs 5-6 per kg for 40s count and would mean Rs 1-Rs 1.5 crore additional cost for a 25,000 spindle spinning mill.
The textile industry has urged the government to exempt them from the tariff hike. Contending that even at the current power rates, the difference in cost of production for producing 40s count yarn between Tamil Nadu and Gujarat works out to almost Rs.20 per kg, textile mills in the region.
A majority of the mills in Tamil Nadu are incurring cash losses under the current scenario. The various innovative textile policies announced by the cotton producing states like Gujarat, Maharashtra, Madhya Pradesh and Telangana have come as a major challenge to sustain the viability of the textile mills in Tamil Nadu.
Moreover due to steep fall in yarn exports and crash in cotton prices, the textile industry has been already facing severe recession from the beginning of March 2014.
The government has been urged to extend 20% rebate for night hour consumption as the textile industry operates round-the-clock. It would also motivate several other HT (high tension) consumers to switch over to working in night shifts providing a major relief during normal and peak hours.
This would enable TANGEDCO to ensure better power supply to the domestic and agricultural sectors and also purchase power at lower rate thus reducing the financial burden.
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