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Wind power industry in TN up in arms as Tangedco seeks to ‘verify captive status’

According to reports, the wind power industry in Tamil Nadu is up in arms against the State electricity distribution company, Tangedco, over a series of circulars sent by the latter to ‘verify captive status of generating plants’. Captive generating units are those power companies that supply at least 51 per cent of the power they produce to their shareholders; the shareholders should collectively own at least 26 per cent of the generating company.

The idea, according to Tangedco, is to levy charges correctly. For instance, while captive power generators do not have to pay ‘cross subsidy charges’, other generators do. In Tamil Nadu, the cross subsidy charge — a charge levied to subsidise electricity supplied to poor consumers — is ₹3.50 a kWhr. Tangedco ostensibly wants to make sure generators do not fudge numbers so as to illegally avail themselves of exemptions from charges.

“We are only asking them to produce evidence that equity participation is as per law,” the Chairman of Tangedco, Sai Kumar, told BusinessLine.

However, wind power producers are seeing red in this move. One producers association has filed a petition in the Madras High Court, viewed by BusinessLine, which terms Tangedco’s move as “arm twisting”.

The reason is that at least one of the documents demanded by Tangedco for verification of the ‘captive status’ is impossible to produce — audited balance sheets for 2016-17, which ended recently. Some wind power companies have alleged that Tangedco is refusing to grant captive status to eligible generators on the grounds that they have not produced the audited balance sheets for 2016-17.

On the basis of the circulars issued by the Tangedco headquarters to its field staff, Superintending Engineers have started serving demand notices, running into crores of rupees.

One industry association has also held that Tangedco has no authority to call for such papers, which is the remit of the electricity regulatory commission. While Tangedco says it is a move is to make sure that those ineligible do not escape paying dues, the industry sees it as a step to raise revenues.

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