West Bengal Defends Industrial Power Tariff Hike for DVC Area Amid Pushback From Steel Sector

Industrial power tariffs in parts of West Bengal are scheduled to rise starting September 1. The West Bengal State Electricity Distribution Company Ltd (WBSEDCL) has clarified that the proposed hike will be restricted to consumers located within the Damodar Valley Corporation (DVC) command area, adding that the rates will remain competitive following the adjustment.

The revision involves an increase of ₹1 per unit for 33 KV connections and ₹1.5 per unit for 11 KV connections. Sumit Mukherjee, Director (Distribution) of WBSEDCL, stated that the planned hike applies exclusively to industrial consumers in the DVC command region.

'Even after the proposed increase, our tariff will remain Re 1 per unit lower than that of DVC. Earlier, the gap was ₹2 per unit,' Mukherjee said.

Providing further details on the current structure, Mukherjee noted that the tariff applicable in the rest of West Bengal, outside the DVC command area, exceeds ₹7 per unit for industrial consumers. WBSEDCL operates under two distinct tariff regimes. In the DVC command area, WBSEDCL and the Corporation share a common distribution licence covering regions on both sides of the Damodar river across parts of Burdwan, Howrah, Hooghly, and Bankura. Outside this zone, WBSEDCL acts as the sole distribution licensee under a separate tariff structure.

The announcement has drawn pushback from industry bodies. Steel industry stakeholders have urged the state government to roll back the proposed hike, arguing that higher electricity rates could inflate production costs and potentially hinder ongoing efforts to attract new investments.

Vivek Adukia, Chairman of the Steel Re-Rolling Mills Association of India (SRMA), pointed out that the current rate for 33 KV stands at ₹4.70, which will rise to ₹5.70 per unit—representing an increase of over 20 percent. He noted that this tariff was fixed only two to three years ago.

A joint delegation representing the SRMA and the West Bengal Sponge Iron Manufacturers Association (WBSIMA), accompanied by promoters of several steel companies, recently met with state Industry Minister Tapas Roy and PWD and PHE Minister Ajay Poddar to discuss the issue. The delegation argued that the increase would disproportionately raise costs for energy-intensive steel units.

While association sources claimed that ministers assured them the increase would not exceed 50 paise per unit, SRMA and WBSIMA have formally sought a complete waiver.

State Industry Minister Tapas Roy confirmed that the administration has received the representation. 'We have received their prayer and forwarded it to Chief Minister Suvendu Adhikari. But, there was no assurance from our end to the industry,' Roy said.

In addition to addressing the power tariffs, the industry delegation also requested an annual allocation of 10 million tonnes of high-grade coal from Eastern Coalfields Ltd to sustain sponge iron production. Furthermore, they sought 15-20 million tonnes of iron ore fines and lumps from the Odisha Mining Corporation, routed through the West Bengal Mineral Development and Trading Corporation.

"Energy costs are a critical component for heavy manufacturing and steel production. When state distribution companies revise tariffs upwards, it directly impacts the operating margins of energy-intensive businesses. While state authorities maintain that regional tariff differentials keep rates competitive compared to alternative providers, policymakers must carefully balance state revenue needs with the long-term competitiveness of local manufacturing industries to sustain regional capital investments." — Dr. Shishir Gupta, Founder & CEO, StartupLanes