Himachal: Power tariff highest in region, industry expansion plans hit

Ambika Sharma

Solan, July 21

The industry is apprehensive that the recently announced subsidy of Re 1 on power tariff will also be rolled back after the state government withdrew subsidy for domestic power consumers.

The HP Electricity Regulatory Commission had hiked the power tarrif by Re 1 per unit in March this year. The state government had announced a subsidy after the industry resented the “abnormal” hike, which had increased the monthly power bill by nearly 20 per cent.

Industry associations say that the existing power tariff is the highest in the region. Rajiv Aggarwal, president, Baddi-Barotiwala Nalagarh Industries Association (BBNIA), says, “The state has lost the advantage of having cheaper power as its unique selling point which had attracted investment in the past.” Industries are offered cheaper power in Uttarakhand, Jammu and Kashmir, Punjab, Haryana and Chandigarh.

Aggarwal says that apart from affecting the expansion plans of the existing industries, it is a major deterrent to the establishment of new industrial units. “The industry also suffers from the highest electricity duty nationally which was brought down to 16.5 per cent after the intervention of court as against the increase of up to 19 per cent imposed by the state government last year.”

The industry has blamed HP State Electricity Board Limited for failing to control its mounting losses and levying the industry higher power tariffs. “The board’s average realisable revenue (ARR) projected this year was as high as Rs 9,000 crore, which was a steep rise from Rs 6,000 crore ARR in the past few years. The ARR will increase further in February 2025 and lead to another power hike,” says Sailesh Aggarwal, adviser to the BBNIA.

The power tariff has steadily increased in the past three years with a 50 paise per unit hike last year, says Sailesh. He adds that the industry contributes Rs 100 crore of the Goods and Services Tax (GST) every month. The industry is also peeved that despite the enforcement of the GST in 2017, the government continues to impose state-specific levies, imposing additional burden on them.

Advantage lost: BBNIA

“The state has lost the advantage of having cheaper power as its unique selling point, which had attracted investment in the past,” said Rajiv Aggarwal, president, Baddi-Barotiwala Nalagarh Industries Association (BBNIA).