Coimbatore’s industries call for power sector reforms - The HinduPublished - July 02, 2026 07:50 pm IST - COIMBATOREIndustry associations in Coimbatore have urged the Tamil Nadu government to look at power sector reforms so that the competitiveness of the State’s industry is not affected.The Southern India Spinners’ Association (SISPA) said avoiding the electricity tariff hike serves as significant relief for Tamil Nadu’s spinning and textile sectors. The government should consider certain long-pending electricity tariff reforms to enhance the competitiveness of the textile and spinning industries. Production costs have risen significantly over the past few years for the mills due to increases in energy charges, maximum demand charges, peak hour charges, fixed charges, and various other direct and indirect levies. These charges should be reviewed, and fair revisions made, taking into account the operational capacity of the industries, said Association secretary S. Jagadesh Chandran.Tamil Nadu’s electricity tariffs are currently high when compared with competing States. The electricity tariff structure needs to be restructured to ensure competitiveness.Additionally, the Association sought a review of the maximum demand charges’ and peak hour charges imposed on spinning mills. Complete removal of network charges imposed on rooftop solar projects will be a significant step towards further promoting consumption of renewable energy.According to the Coimbatore District Small Industries Association (CODISSIA), certain provisions contained in the draft Tamil Nadu Electricity Regulatory Commission (Multi-Year Tariff for Distribution) Regulations, 2026, which, if implemented in their proposed form, are likely to adversely affect Tamil Nadu’s manufacturing sector, particularly MSMEs.The Association’s primary concern relates to the proposed fuel and power purchase adjustment surcharge (FPPAS) mechanism. The Draft Regulations empower the distribution licensee to automatically recover up to 90% of monthly fuel and power purchase cost variations without prior approval of TNERC and does not prescribe any annual cumulative ceiling. Industries operating on thin margins and executing fixed-price domestic and export contracts cannot accurately estimate their monthly electricity costs under such a mechanism. Unpredictable monthly power cost increases will adversely affect pricing, cash flows, export competitiveness, and investment decisions, said Association president V. Rangaswamy.Long-term financial sustainability of the electricity sector and the competitiveness of Tamil Nadu’s industries are complementary objectives that must progress together. So, the State government should revisit the proposed provisions relating to automatic FPPAS recovery and other consumer-impacting clauses before finalising the Multi-Year Tariff Regulations, he said.Published - July 02, 2026 07:50 pm ISTSign in to unlock member-only benefits!Access 10 free stories every monthSave stories to read laterAccess to comment on every storySign-up/manage your newsletter subscriptions with a single clickGet notified by email for early access to discounts & offers on our products${ ind + 1 } ${ device }Last active - ${ la }