The HP Steel Industries Association (HPSIA) has appealed to the Chief Minister for immediate intervention to bring down electricity tariffs, citing the substantial financial burden on the industry. At present 28 steel units are functioning in various industrial clusters across the state.

The government recently imposed a cess on milk ranging from 0.02 to 0.10 paise per unit, an environmental cess of 0.10 paise per unit on industrial consumers and withdrew the power tariff subsidy of Rs 1 per unit in September 2024.

According to industry comparisons, the three-fold hike has pushed power prices for energy-intensive industries like steel and iron to levels higher than states like Uttarakhand, Haryana, Jammu and Kashmir and Punjab. The association, in a recent meeting with the Chief Minister in Shimla, has called for swift action to protect the steel sector, which has been a key contributor to the state’s economy and employment for over two decades.

HPSIA general secretary Rajeev Singla said the industry provides direct and indirect employment to more than 1 lakh people and contributes over Rs 1,000 crore annually through various taxes including GST and excise duty. Puts “For the last two decades, we have contributed to the development of the state. A key factor in our survival has been adequate electricity rates, which have made industrial operations possible,” Singla added.

However, the recent hike in electricity rates has threatened the viability of these units. Another investor pointed out, “Rapid growth threatens the survival of our industries and the livelihoods of thousands of families who depend on them.”

The association requested the Chief Minister to consider the significant socio-economic contribution of the industry and review the electricity tariff structure to ensure sustainability of its operations.

“Tariff revision will not only secure the future of thousands of families but will also uphold the reputation of Himachal Pradesh as an investor-friendly and progressive state,” Singla said.

Apart from the tariff hike, steel manufacturers have been given 15 days to settle the arrears of Rs 1 per unit due in September 2024. Superintending Engineer Darshan Saini said temporary power cut after failure to meet payment deadline. In Badi, authorities struggled to collect payments due and in Gol Thai, a unit had to reduce power load due to unsustainable surge months ago.