Entrepreneurs hail Govt. decision on captive power

By Our Special Correspondent

HYDERABAD, DEC. 26. The decision of the Cabinet to allow captive power generation has been welcomed by entrepreneurs here for it overcomes several restrictions currently in force.

At present, about 1,800 MW of power is in the captive power sector, generating about 4,000 Million Units per year. The industrial consumption of the A.P. Transmission Corporation (A.P. Transco) is about 4,894 MU. If captive power generation is disallowed, then industrial consumption will nearly double, giving an additional income of Rs. 600 crores to the AP Transco.

Recently, the Chairman of the Andhra Pradesh Electricity Regulatory Commission (APERC), Mr. G.P. Rao, said in many States domestic tariff was lower because of high consumption by industrial sector. With this in view, the APERC issued a number of Practice Directions, regulating the use of captive power, such as that they should continue to operate only on a ``stand by basis'', and that in future, captive power would not be generally allowed, except where there was continuous process with critical requirements of continuous supply of power, and where the industry was sensitive to frequency and voltage variations. These directions were challenged in the High Court

In the 1980s, when power cut was a normal phenomenon, the State Government permitted industrial consumers to put up captive power projects during the outage of power from grid. At that time, captive power plants were used only as standby, when regular power supply was not available, because the tariff for industrial consumers was lower than the cost of generation from captive units.

If the Government decides to remove restrictions on the use of captive power, the directions issued by the APERC would have to be removed as well.

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Section  : Southern States
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