The State government has a prohibitive policy on captive power generation, with 26 to 28 per cent of what is generated having to be sold to state discoms. While the policy was initiated to discourage captive generation earlier in the decade, there is a need to change it now as no respite from the power crisis is expected in the next year and a half.
Currently, no input tax credit is given on generators and diesel. The industrial sector has to pay an electricity duty as well as maximum demand (MD) charges even when the sector is not getting full power supply. The Federation of Andhra Pradesh Chambers of Commerce and Industry has asked the principal secretary of the energy department to change the prohibitive policy and to also fix a power quota for the industrial sector.
“The prohibitive policy towards captive generation needs to be changed so that more industries set up captive generation. The current 26 to 28 per cent of the power generated to be given to the discoms should be reduced to 10 per cent. Several industries want to set up their own captive plants, especially since the power situation is not likely to improve anytime soon,” said Fapcci president Devendra Surana.
The association has asked for graded power cuts to industries, depending on usage per month. Once the quota is fixed, continuous power supply would be available to the industry. “While all units are reeling under a power crisis, there are many that cannot afford to shut down and there are many more that cannot afford to pay the extra price for the power. As an alternative, all units should be given a consumption quota in terms of units,” Fapcci’s letter to the energy department suggested.