Relief for MSMEs as govt cuts peak hour charge for LT to 15 pc

CHENNAI: In a relief to the medium and small-scale industries, the state government has announced a reduction of time of day (ToD) charges for Low Tension Industries (III-B) during peak hours from 25 per cent to 15 per cent.

According to the Government Order of the Micro, Small and Medium Enterprises Department, there were requests from various MSME associations stating that the revised tariff is high for the industries to pay the electricity charges and requested to reduce the ToD charges.

The order said that the energy department is directed to issue a necessary policy directive to the TNERC under section 108 of the Electricity Act, 2003 to provide a subsidy to Tangedco to compensate for the reduced ToD charges for LT Industries (III-B) during peak hours from 25 per cent to 15 per cent.

In the latest tariff order, TNERC has introduced the ToD charges for the LT and LTCT consumers who had to pay 25 per cent additional charges for energy consumption during the peak hours of 6 am to 10 am and 6 pm to 10 pm.

Sources in Tangedco said that the state government would incur an additional expenditure of Rs 120 crore due to the subsidy for reducing the ToD charges from 25 per cent to 15 per cent.

Something is better than nothing, say entrepreneurs

KE Raghunathan, chairman, Association of Indian Entrepreneurs, said that as per the Government Order, the subsidy for reducing ToD charges by 10 per cent amounts to 15 paise per unit of total consumption for the MSMEs under the LT Industries (III-B).

As per the revised tariff, the LT industries consumers pay a tariff of Rs 7.50 per unit. He said that in the absence of installation of the ToD meters for the consumers to compute the peak hours charges, the TNERC has ordered to collect 25 per cent ToD charges on 20 per cent of their total consumption. “It means a five per cent increase in the energy charges that is 37 paise per unit which is Rs 7.87 per unit. With the government offering a 10 per cent subsidy on ToD charges, the MSME industries will pay Rs 7.72 per unit instead of Rs 7.87 per unit, which is a saving of Rs 0.15 per unit. Is this a big saving, that will make several MSME enterprise progress? The answer is obvious. But yes, something is better than nothing,” he added.