The grid support charges (GSC) on captive power plants (CPP) proposed by the two power distribution companies (Discoms) of Telangana at a very high rate of ₹2,37,500 per megawatt per month would be detrimental to the State’s objective of doing business with ease at competitive costs, Telangana chapter of Confederation of Indian Industry (CII) has said.
“The grid support or parallel operating charges will significantly increase the production costs of manufacturing units and make them uncompetitive and would also discourage industries intending to set up new units or expanding the existing manufacturing units in the State”, chairman of Telangana chapter of CII Sameer Goel said in a recent letter addressed to Minister for IT and Industries K.T. Rama Rao.
Seeking the intervention of Mr. Rama Rao in the matter, Mr. Goel requested the former to pursue the issue with the Discoms so that grid support charges were not levied on industries operating in Telangana with captive power plants and operating them in parallel to the State Grid as being done by many States including Odisha, Karnataka and West Bengal. As such, there was no provision in the Electricity Act, 2003 or the grid code or in any of the regulation of Telangana State Electricity Regulatory Commission (TSERC) and Central Electricity Regulatory Commission (CERC), Mr. Goel pointed out.
In their tariff proposals submitted to TSERC for 2022-23, the two Telangana Discoms have sought the approval of the regulator for levying grid support charges at ₹2,37,500 on captive power plants from April 1. As per the proposal, persons (industrial units) operating captive power plants in parallel to the State Grid have to pay grid support charges on the difference between the capacity of captive power plants in kVA and the contracted maximum demand in kVA with licensee and all other sources of supply at a rate equal to 50% of the prevailing demand charge for high-tension consumers.
The proposed grid support charges at ₹2,37,500 per megawatt per month was very high and would significantly increase the manufacturing cost and make the industry in Telangana – cement, paper, ferro alloy and others – uncompetitive, Mr. Goel said adding that States such as Tamil Nadu, Madhya Pradesh and Gujarat were levying grid support charges at a minimal rate of ₹20,000 to ₹30,000 per megawatt per month.
