India’s Ministry of Steel has commenced talks with power generation and distribution companies to explore the possibility of these companies treating all steel producers as a single entity and charging a uniform electricity tariff irrespective of the geographical location of the steel mill, a senior government official said on Wednesday, June 21.
The official said that, with these talks with various power generation and distribution companies, the steel ministry aims to find out whether the model applicable in the case of government owned and operated Indian Railways could be replicated by treating all steel mills consuming electricity as a single entity.
Indian Railways draw electricity from the grids of various power distributions companies as a single consumer to operate passenger and freight trains across the country.
It was pointed out by the senior government official that treating all steel mills owned and operated by different companies as a single entity would bring about uniformity of energy costs and ensure a level playing field for all steel mills.
It would also eliminate competitive advantages and disadvantages faced by steel mills when one state offers lower electricity tariffs while a steel mill located in another state has to continue paying a higher tariff, the official said.
For example, the government of central Indian state of Chhattisgarh reduced electricity tariffs effective from April 1 this year by RUB 1.40 per unit. In contrast, the eastern Indian state of Odisha has hiked electricity duty payable by captive power plants by 83 percent, in effect pushing up the energy costs of steel mills and aluminum smelters located in the state.