Threatens To Disconnect Electricity Connection For Refusal To Pay At Higher Rate, FHRAI Writes To The Home Minister Requesting Intervention

India's apex Hospitality Association - Federation of Hotel & Restaurant Associations of India (FHRAI) has submitted a representation to the Hon’ble Home Minister, Ministry of Home Affairs – Shri Amit Shah requesting his urgent intervention in implementing the judgement passed by the Joint Electricity Regulatory Commission (JERC) for the State of Goa and Union Territories (UT) with respect to charging of electricity tariff at industrial rates for hotels in the UT of Andaman & Nicobar Islands. The Association has stated that despite JERC’s decision through its order dated 02/12/2020 and the Hon’ble High Court of Calcutta’s order dated 31/08/2021 directing the Andaman & Nicobar Administration to charge electricity for the Hospitality sector at industrial rates, the Administration and the Electricity Department has continued to charge commercial rates to the hospitality units. Not only has the Administration refused to execute the orders but its Electricity Department has now sent notices to members of the Hoteliers Association of Andaman & Nicobar Islands (HAANI) asking them to pay the higher commercial rates and refusal to comply would lead to disconnection of electricity to their establishments.

“In May 2019, the Andaman & Nicobar Electricity Department started charging commercial rates on electricity from the distressed hospitality sector. A few of our members challenged this decision in JERC and through its order the JERC ruled that the hospitality sector in the Andaman & Nicobar Islands is indeed an industry and has to be charged industrial rates. But the Electricity Department ignored the order and continued to charge commercial rates to the hospitality units, which is in direct contravention of the order. Later, the Hon’ble High Court of Calcutta too ruled in favour of the members of the Hoteliers Association of Andaman and Nicobar Islands directing the Electricity Department to issue bills on industrial rates and not on commercial rates. The HC also directed the Department to rectify the previous electricity bills and issue bills based on industrial rates retrospectively from December, 2020. Yet, the Administration has blatantly violated both orders and continues to charge electricity at higher rates. We request the Hon’ble Home Minister to intervene and direct the Andaman & Nicobar Administration to charge electricity at industrial tariff for the hotel industry as per the directions of the Hon’ble JERC & Hon’ble High Court of Calcutta and save the already distressed hospitality industry,” says Mr Gurbaxish Singh Kohli, Vice President, FHRAI.

The COVID-19 pandemic has severely impacted the economy on the islands and as a result several hotels and resorts have shut down. Many more are facing imminent closure. Hospitality sector is the backbone of the Andaman & Nicobar Islands and provides maximum employment on the islands.

“The Hoteliers Association of Andaman & Nicobar Islands wrote several letters to the Islands’ Administration requesting them to rectify their electricity bills and to charge industrial rates as per the directions of the JERC. However, the Administration not only refused to execute the orders but instead the Electricity Department sent notices to members of the Association threatening to disconnect their electricity connection if they refuse to pay the bills,” adds Mr Kohli.

“Further, the Electricity Department has proposed an increase in the tariff rates for FY2021-22 for its industrial consumers by 87.5 per cent from the existing Rs.8/- per kWh to Rs.15/- per kWh. The proposed charges for the commercial consumer were also enhanced from Rs.12/- per kWh to Rs.15/- per kWh. The Electricity Department of the Andaman & Nicobar Administration through these proposed charges has tried to circumvent the JERC order and has ironically brought the charges of the industrial consumer at par with the commercial consumer. The JERC however did not agree with the proposed rates and instead agreed an increase for industrial rates from Rs.8/- per kWh to Rs.9/- per kWh and commercial rates from Rs.12/- per kWh to 12.75/- per kWh. The JERC further asked the Electricity Department to comply with its order dated 02/12/2020. The industry is in dire need of the Government’s support in bringing relief for the hospitality sector and we hope that the Home Minister will do the required to help the industry through these trying times,” concludes Mr Kohli.