32,000 MSMEs get backdated electricity shock

Time of India

11-07-2025

Surat: In a development affecting more than 32,000 micro, small and medium enterprises (MSMEs) in South Gujarat, businesses were hit with additional electricity charges for the past 12 months.
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Industry sources say these charges will total Rs 60 crore and will affect textile units running operations such as weaving, rapier jacquard, embroidery and other industries that use low-tension maximum demand (LTMD) connections. The additional fees stem from peak hour charges, calculated at 0.45 paisa per unit above regular rates.
According to DGVCL officials, the average supplementary bill amount is Rs 18,750, to be recovered from 32,000 users.
Sources in industry said many users received supplementary bills for more than Rs 40,000.
The delay in billing arose because Dakshin Gujarat Vij Company Ltd (DGVCL) did not previously calculate peak hour charges, as the mechanism to collect time data on electricity consumption was not in place. DGVCL started installing new meters and upgrading its IT infrastructure to address this gap. The designated peak hours, according to DGVCL, are from 7am to 11am and 6am to 10pm.
Textile units, which typically operate round the clock, are particularly affected, receiving substantial bills for peak hour usage. Conversely, units that do not operate during these hours have to pay less.
DGVCL officials said they are complying with directives from the Gujarat Electricity Regulatory Commission (GERC), which mandated the collection of these charges starting June 2024. "We could not collect the peak hour charges earlier as the system was not in place.
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The meter configuration and IT system upgrade took time," said a DGVCL senior official.
Following appeals by the Southern Gujarat Chamber of Commerce and Industry (SGCCI) to cabinet minister for energy Kanu Desai, the govt has allowed businesses to pay these charges in instalments without interest. "The minister tried to find a solution, but due to the GERC order, it cannot be reversed. Textile units are the most affected as we operate 24 hours," said Ashok Jirawala, vice-president of SGCCI.
"The govt heard us positively and offered solutions, but the issue would not have been created if DGVCL had taken prompt action a year ago. The produced material has already been sold according to the cost calculated then, and in many cases, tenants have vacated rented units, so how does one recover the additional electricity charges," said Mayur Golvala, secretary, Sachin Industrial Co-Op Soc.
"There must be a consistent policy related to industries so that we can focus on production and global competition. If we are affected by such unpredictable developments, it becomes difficult to operate," said Chetan Maniya, president of Rapier Jacquard Weavers Association.
The rationale behind the peak hour tariff is to incentivise electricity use during periods of higher solar power production, typically the afternoons, thereby reducing reliance on conventional power sources during peak demand.