CEA To Verify Captive Status Of Power Plants Every Year: Draft Rules

CEA To Verify Captive Status Of Power Plants Every Year: Draft Rules

The Central Electricity Authority (CEA) released a draft guidelines on the issue of verification of the captive status of power generation plants. It has now asked the stakeholders and other people concerned to send in their comments on the issue by December 1, 2013. 

These norms will be applicable for the generating plants where the captive generating plant and its captive users are located in more than one state. These norms said that the verification of status of captive generation and captive users will be done on an annual basis. For the process, the captive generation plant needs to submit an application along with the inquisitive documents to the CEA. It has also specified the timelines. 

“”The CGP and Captive users shall furnish an affidavit not after 30th September as per format enclosed at Schedule I to the Verifying Authority enclosing therewith the details as specified in the format(s) regarding their annual electricity generation, captive user-wise consumption and equity share holding during the previous year. Verifying Authority shall issue communication about the status of CGP and Captive users within two months from the receipt of the application along with the requisite documents complete in all respect,” the norms said. 

The CEA norms said that the RLDC, SLDC and Distribution Licensee, in whose area the Captive Generating Plant or Captive user is located, would need to extend necessary assistance to the Verifying Authority in the verification of captive status of generating plant and its user(s).

As per the draft norms, the CEA will be the verifying authority. The norms allow consumption of electricity by the captive users either directly or through energy storage systems. It also allows consumption of power by a subsidiary firm of a company which is captive user. 

The draft norms said that any change in ownership structure of the plant must be intimated to the CEA. “In case of any change in ownership structure during the year under consideration, a statement having the details of change in the ownership structure along with the relevant documentary evidence shall be submitted to the Verifying Authority along with the submission of application for verification of the status of CGP and Captive users,” the norms said. 

It also talked about the ownership and voting rights of the captive users in such arrangements. “The CGP and its Captive users shall ensure that at any point of time in a year, not less than 26% of the ownership with voting rights of the generating plant/station or the units identified for captive use, as the case maybe, is held by the Captive users and they consume not less than 51% of the electricity generated on annual basis,” the report said.

The norms also said that in case the firms fail to pass the verification process, they would lose the captive status and concessions accordingly. 

“When a shareholder defaults in fulfilling criteria of electricity consumption provided under Rule 3 of Electricity Rules, 2005 and when other captive users together comply with ownership criteria of not less than 26%, the defaulting shareholder shall cease to be the captive user forgo the concessions available to a captive user. The other captive users together who comply with criteria of not less than 26% ownership and consumption of not less than 51% of aggregate electricity generated +/- 10% in proportion to their individual shareholdings shall retain the captive status,” the report said.