Steel, ferro alloys industries seek Bengal CM's help to reduce 'tariff hike' by DVC

Kolkata, May 30 (PTI) Trade bodies representing the steel and ferro-alloy industry in West Bengal have sought Chief Minister Mamata Banerjee’s help to reduce the alleged steep hike in power tariff by Damodar Valley Corporation (DVC), which they claim would lead to a shutdown of operations.

DVC, however, dubbed the claims as “factually inaccurate”.

In a joint statement, the Damodar Valley Power Consumers Association, the Steel Re-Rolling Mills Association of India and the West Bengal Sponge Iron Manufacturers Association claimed that the revised power tariff approved by the West Bengal Electricity Regulatory Commission (WBERC) for DVC sets the rate at Rs 4.64 per unit for 2025–26.

Additionally, an extra Rs 1.36 per unit is being charged toward arrears accumulated between 2014 and 2020, raising the effective tariff to Rs 6 per unit, it added.

They also claimed that DVC imposed extra charges through Energy Charge Rate (ECR) and Monthly Variable Cost Adjustment (MVCA), amounting to another 50 paise per unit.

"The net chargeable tariff to industries will now be around Rs 6.80 per unit, a 30 per cent increase, which is unaffordable and threatens the survival of our units," the appeal stated.

"We are not against paying dues, but request that the Rs 1.36 per unit past arrears be recovered over the next six years to avoid tariff shocks," it said.

The industry bodies also alleged disparity in rates, stating that DVC supplies power to Jharkhand consumers at Rs 4.42 per unit, and demanded a forensic audit of variable charges such as the Energy Charge Rate (ECR) and Monthly Variable Cost Adjustment (MVCA).

DVC officials maintained said the average power cost in Jharkhand is Rs 5.61 a unit.

"West Bengal is the second-largest contributor to India's secondary steel production, ferro alloys, pig iron, and pellets, and third in sponge iron output. Collapse of this sector will endanger the livelihoods of lakhs of people," the industry bodies warned.

In a statement, DVC rejected the claims as factually inaccurate and selectively presented.

It said the tariffs are determined by respective state regulatory commissions — WBERC for West Bengal and JSERC for Jharkhand — and not unilaterally fixed by DVC.

According to the utility, the tariff in West Bengal remained largely unchanged since the 2018-19 fiscal due to prolonged litigation initiated by the same associations, which the Supreme Court declared untenable in 2018. The arrears component became payable only after the apex court closed the matter earlier this year, and ordered the payment within two months.

“We have complied fully with regulatory and court directions and shown great patience through years of litigation,” DVC said, adding that it continued power supply despite escalating input costs.

The utility defended the current rates as "cost-reflective and justified" under WBERC’s approval, and said it has floated the idea of a common regulator to ensure tariff uniformity across states.

DVC also said that it cannot compromise on financial sustainability, especially after absorbing costs during a period of frozen tariffs.

Calling it a crisis, the trade bodies urged the CM to engage with WBERC and DVC at the earliest.

"Your timely intervention will be instrumental in resolving this issue and saving these crucial industries in the state," the statement added. PTI BSM MNB RBT