The Andhra Pradesh government has threatened to disconnect power supply to state-run steel maker Rashtriya Ispat Nigam's lone Vizag facility for excess drawal of power.
New Delhi: The Andhra Pradesh government has threatened to disconnect power supply to state-run steel maker Rashtriya Ispat Nigam's lone Vizag facility for excess drawal of power.
The problem, which stemmed from the alleged overdrawal of power by the CPSU than the contracted maximum demand, has also resulted in the state levying a Rs 70 crore penalty during the four-month period ending December, 2012.
"The state government has been frequently threatening the power disconnection. It has also levied a Rs 70 crore penalty on RINL for allegedly drawing more power than contracted. The power disconnection can seriously hamper its production," a source in the Steel Ministry told PTI.
The production of RINL, which refuted the government's claim saying it has drawn power much below than the contracted maximum demand, had got hampered since July when the Andhra Pradesh government imposed various restrictions on power usage.
The company, having a three million tonne per annum steel plant in Vizag, has a thermal power plant with a capacity of 247.5 MW.
The captive plant supplied approximately 86 percent, 84 percent, 86 percent and 85 percent of its power needs in financial years 2010, 2011 and 2012 and the three months ended June 30, 2012, respectively.
RINL is dependent on public utilities for the remaining power requirements. In financial year 2012 and three months ended June 30, 2012, purchased power accounted for around 14 percent and 15 percent, respectively, of total expenditure.
The source said efforts are being made by RINL to reach an amicable solution to the problem and held several rounds of meetings with the heads of the power utilities and the state Chief Minister.
"Several rounds of discussions were held with the Chief Minister, Chairman of APERC and others to consider RINL's request for drawal of power as per agreement with the state for the contracted maximum demand without restrictive and control measures as well as waiver of the penalty. The decision in this regard is awaited," he said.