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The Group Captive System: The Regulations!

Fair enough, but what does the Act say about captive generation? That makes an interesting reading.

 

Any PERSON may construct a captive generating plant for his / her own use. And who is this PERSON? How is a PERSON defined by the Electricity Act?

 

‘(49) “person” shall include any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person; ‘

‘Person’ would represent not just an individual, it includes any entity, incorporated or not. Even artificial juridical person! That is a very wide scope which would bring all entities under its fold. So now, if I am a shareholder in a company, I am one of the owners of the company and then if the company puts up a power plant as a legal owner of the company I can become a consumer of their power under Captive scheme.

 

The Act does not qualify the Person on when that entity becomes an owner; which essentially means even if I have one share in a power generating company, then I become a rightful owner of that company and I can consume power as a captive consumer!

 

A whole gamut of people could become a captive consumer. In order to regularise this, certain specific rules have been laid down by the Electricity Rules, which we will see later.

 

Let us continue with the Act and what it says.

 

Some of the salient points which we normally oversee and are not used by the captive power plants are:

 

1.     They may have dedicated transmission lines. What this means is that the transmission lines laid by the generating company to the licensee’s evacuation point, could be treated as ‘dedicated’ and they will continue to own it, operate it and maintain it. It is NOT transferred to the Distribution Licensee under any pretext.

 

2.     Since the transmission lines are held by the generating company, the meter should be fixed at the substation and not at the plant! But if the transmission line from the generation bus bar to the substation is held by the licensee and it is not a dedicated feeder, then the metering can be done at the generating company’s evacuation point!

 

3.     Another important point to note is that the captive generating plant is licensed by default, to sell power to any licensee and to any consumer at all points of time, irrespective of its captive status. What this primarily means is that, open access can be demanded where there is capacity available for transmission and wheeling and that the distribution company or the licensee has to provide the same.

 

This can happen with the excess power that a captive generating plant may have and its captive consumers fail to consume the same. In such a case, the generating plant can sell the power to other third party consumers paying due surcharges, transmission and other charges as laid down by the State Commission.

 

The licensee agrees at both ends to carry the required load. He agrees at the generation end to evacuate the complete generation capacity. The same way, he or a similar licensee accepts to deliver the specific capacity wanted by the consumer at the consumption end. Therefore, denial on the grounds that capacity is not available or that there is no carrying capacity become unacceptable.

 

4.     As a matter of fact, the Act further clarifies that, to repeat the words of the Act, the captive generating plant ‘shall have the right to open access for the purposes of carrying electricity from his captive generating plant to the destination of his use’. The Act does not say destination of his ‘captive’ use! It says ‘destination of his use’, meaning any use. Could be captive or otherwise!

 

 

 

(To be continued…)


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