TNERC publishes draft rules to review status of privately owned power plants

The Tamil Nadu Electricity Regulatory Commission (TNERC) has published draft rules to review the status of captive power plants (power plants primarily intended for captive consumption) and offtakers on the basis of consumption and share capital criteria under the Electricity Rules, 2005.

As per the draft Tamil Nadu Electricity Regulatory Commission (Verification of Status of Electricity Generating Establishments/Consumers of Electricity in Tamil Nadu) Regulations, 2024, self-generating establishments include establishments set up by individuals, co-operative societies or associations of persons.

The monitoring of captive status is to be carried out annually by the distribution licensee (Tangedco), after the end of the financial year. Documents specified in the specification are to be submitted by the owner and operator of the captive power plant to Tangedco within one month of the end of the financial year and the state power utility is to verify the captive status of consumers within three months thereafter, the draft norms said.

In case of a single captive user, a minimum of 26% equity interest in the generating unit shall be held by the captive user. The single user shall consume a minimum of 51% of the total combined generation per annum by the generating units of the captive, it said.

As for the cooperative, 26% of the shares and 51% of the consumption in electricity-producing plants must be covered jointly by the cooperative members, the draft standards state.

In the case of a partnership/limited liability partnership (LLP), the partners’ share in the closed plant cannot be less than 26% and the energy consumption by the partners cannot be less than 51% net of the electricity generated per annum, it added.

In the case of group closed customers, i.e. associations of persons/special purpose companies, closed customers must hold in total not less than 26% of the equity shares with voting rights in the power plant, and such customers must consume not less than 51% of the total net electricity generated annually, proportionally to their shares in the ownership of the power plant, with a deviation not exceeding plus or minus 10% — stated in the standards.

If an own-account generator or own-account user does not meet the ownership and consumption criteria, they will be denied own-account generator status for that year and will be subject to cross-subsidy surcharges, a surcharge and other charges applicable to open access customers.

The entity committing payment evasion is obliged to pay the fees calculated by Tangedco within one month from the date of invoice issuance, as stipulated in the standards, which also specify other conditions.