Telangana ERC issues guidelines to streamline functioning of captive generative plants

According to the Commission, the procedure aims to ensure that CGPs and captive users meet the required criteria for captive status based on electricity consumption and equity shareholding

Hyderabad: To streamline the verification of captive status and ensure that captive generating plants (CGPs) and their users comply with the requirements outlined in the Electricity Act, the Telangana State Electricity Regulatory Commission (TGERC) has issued a new procedure to verify the status of CGPs and their associated captive users in the State.

The TGERC aims to enhance transparency and accountability in the State’s power generation and consumption system by implementing these procedures.

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According to the Commission, the procedure 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 need to apply to the distribution licensee for verification of their captive status and the distribution licensee has to submit a consolidated report to the Commission by June every year.

As per the new norms, 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.

For a CGP to qualify as “captive,” its captive users must hold at least 26 percent of the equity share capital with voting rights and consume at least 51 percent of the electricity generated annually.

If a CGP is owned by a cooperative society, the members of the society must collectively satisfy the 26 percent ownership and 51 percent 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.

The 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.