Sugar mills seek level playing field in power purchase price

Crises facing the sugar mills in Karnataka never seem to end. While, last year the mills had to grapple with the excess production of sugar and low price realisation, this year their problems have been compounded by a shortage of cane and lower prices for the power generated by co-generation units. Around19 of the 52 sugar mills in Karnataka have a combined capacity to produce 412 Mw.

However, due to the indifference of the Karnataka Power Transmission Corporation Ltd (KPTCL), which has been purchasing power from various private generators, towards the sugar mills, the co-generation units have been suffering from a lower price realisation.

While KPTCL is buying power from the neighbouring states and independent power producers at Rs 8.88 per unit to meet the shortage, the price paid to sugar mills is in the range of Rs 2.80 - 3.86 per unit. The state is facing a shortage of around 10 million units per day.

While 13 sugar mills supply power to KPTCL, six others supply to private companies like Tata Power and Reliance Energy at Rs 8-10 per unit. According to KPTCL, the mills are paid as per the agreement reached with them many years ago.

Jagadeesh S Gudagunti, President, South Indian Sugar Mills Association (SISMA) said, “We are ready to supply power to the state grid. But we are paid a negligible amount. Even if the KPTCL pays our mills Rs 7 per unit we will be happy to supply to them. Other mills can also install power generating units if KPTCL gives us a level playing field.”