Telangana Electricity Regulatory Commission Implements New Procedure For Verifying Captive Generating Plant Status

The Telangana Electricity Regulatory Commission (TERC) has issued a new procedure to verify the status of captive generating plants (CGPs) and their associated captive users in the state. This procedure, part of the 2024 Open Access Regulations, aims to ensure that CGPs and captive users meet the required criteria for captive status based on electricity consumption and equity shareholding.

Under the new regulations, all CGPs and their associated captive users are required to apply to the distribution licensee for verification of their captive status. The procedure includes submitting a consolidated report to the Commission by the distribution licensee every year, no later than June 30, based on information provided by the CGP and its captive users.

The Commission will verify the captive status of the CGP and its users based on criteria outlined in the Electricity Act, 2003, and the Electricity Rules, 2005. These criteria include requirements on ownership and consumption. For a CGP to qualify as “captive,” its captive users must hold at least 26% of the equity share capital with voting rights and consume at least 51% of the electricity generated annually. If a CGP is owned by a cooperative society, the members of the society must collectively satisfy the 26% ownership and 51% consumption criteria. In the case of a special purpose vehicle (SPV) or partnership firm, the same ownership and consumption rules apply.

The verification process will include a review of electricity consumption by the captive users, including their consumption through energy storage systems. Additionally, subsidiaries and holding companies of captive users may also count toward meeting the consumption criteria. If there are any changes in the ownership structure of a CGP during the year, the concerned party must submit details of the changes to the distribution licensee, along with supporting documents.

CGPs and captive users are required to provide an affidavit by May 31 each year, detailing their electricity generation, consumption, and equity shareholding for the previous financial year. The distribution licensee will analyze this information and submit a consolidated report to the Commission. If any clarifications are needed, the Commission may request additional information from the CGP or the distribution licensee.

If a CGP or captive user fails to meet the required criteria in a given year, they will lose their captive status for that year. However, if the other captive users in the same CGP continue to meet the necessary ownership and consumption criteria, they will retain their captive status. In cases where a defaulting shareholder does not meet the consumption criteria, the CGP will lose its captive status, and all captive users will forfeit the concessions associated with it.

The procedure also specifies that each unit of a CGP must have a separate interface meter that allows real-time communication with the State Load Dispatch Centre (SLDC) or Regional Load Dispatch Centre (RLDC). This ensures accurate monitoring and verification of energy generation and consumption.

These measures are designed to streamline the verification of captive status and ensure that CGPs and their users comply with the requirements outlined in the Electricity Act and Rules. By implementing these procedures, the Telangana Electricity Regulatory Commission aims to enhance transparency and accountability in the state’s power generation and consumption system.