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On June 6, 2024, the Tamil Nadu Electricity Regulatory Commission issued an order regarding a petition filed by Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO). The petition concerned M/s. Amaravathi Textiles sought to determine whether the company’s wind energy plant qualified as a Captive Generating Plant (CGP) for the financial years 2014-15, 2015-16, and 2016-17.
TANGEDCO argued that M/s. Amaravathi Textiles did not meet the criteria to be considered a CGP for the specified years. According to the rules, a CGP must use at least 51% of the electricity it generates for its own consumption. TANGEDCO’s data showed that Amaravathi Textiles consumed only 22% in 2014-15, 22% in 2015-16, and 15% in 2016-17, which is below the required threshold. Consequently, TANGEDCO requested the commission to declare that Amaravathi Textiles’ plant did not qualify as a CGP for these years and to levy cross-subsidy surcharges on the electricity consumed.
M/s. Amaravathi Textiles admitted that it did not meet the 51% consumption requirement but requested that the amount it owes in cross-subsidy surcharges be offset against payments it is due for unutilized energy. They calculated that TANGEDCO owed them a significant amount for the unutilized energy over the same period.
The commission noted the respondent’s admission of failing to meet the consumption criteria. It agreed that the plant did not qualify as a CGP for the financial years in question. However, the commission also addressed the respondent’s claim for a set-off, stating that such a claim is not legally permissible in this type of case. The commission referred to previous orders affirming that the payment for unutilized energy and the collection of cross-subsidy surcharges are separate issues and cannot be offset against each other.
The commission declared that M/s. Amaravathi Textiles’ wind energy plant did not qualify as a CGP for the financial years 2014-15, 2015-16, and 2016-17. The parties were directed to bear their own costs, and the petition was disposed of accordingly.
Please view the document here for more details.
