Karnataka Electricity Regulatory Commission has issued the procedure for data collection, scrutiny and verification of the captive status of power projects and their users in the state.

The status of captive power projects and captive users will be verified annually. Applications for verification must be submitted to the power distribution company (DISCOM) before May 31, following the financial year for which captive status is claimed.

The applicant must provide an affidavit to the DISCOM with details of annual electricity generation, captive user-wise consumption, and equity shareholding for the year under consideration.

The applicant must conduct due diligence for group captive users before submitting the application to the DISCOM. Only those captive users eligible under this procedure should be included in the application. The DISCOM may request clarifications regarding the submitted data or information to verify captive status.

The DISCOM must submit a report on the captive status of the captive power project and its users to the Commission within two months of receiving the application.

The Commission may request additional clarifications from the captive power project developer regarding the submitted data or information. The developer must provide the requisite clarifications and data within the stipulated timeframe. Failure to do so will result in the applicant’s inability to claim captive status for the relevant year.

The State Load Dispatch Centre (SLDC) and DISCOM will support the Commission in verifying the captive status of the generating project and its users.

Shareholding Criteria

To verify compliance, captive power project users are classified into single and group captive users. Group captive users can either be a cooperative society or an association of persons.

For cooperative societies, members only need to collectively meet the minimum ownership and electricity consumption requirements. However, for associations of persons, each captive user must maintain a minimum ownership of 26%. Group captive users that are not cooperative societies must follow this proportionality rule.

The 26% ownership threshold must be maintained throughout the financial year, from April 1 to March 31, regardless of any changes in ownership. A weighted average method will determine the required electricity consumption if ownership changes. If a captive user exits and transfers ownership to a new user, the new user must consume a proportionate share of the electricity generated.

Consumption Criteria

A captive user must consume at least 51% of the net electricity generated annually.

For group captive users, except those registered as a cooperative society, the collective consumption must be at least 51% of the net electricity generated annually. This consumption must be proportionate to their ownership shares in the power project, with a permissible variation of not more than 10%.

In the case of group captive users registered as a cooperative society, the society’s members must collectively consume at least 51% of the net electricity generated annually.

A special-purpose vehicle may own, operate, and maintain a generating station; however, it cannot consume the electricity generated by the captive power project. Since its sole purpose is to own, operate, and maintain the generating station, it does not qualify as a captive user.

Metering

The captive project or the generating units designated for captive use must have a separate interface meter equipped with real-time communication capability with the SLDC or the DISCOM. This meter must comply with the specifications outlined in the Central Electricity Authority (Installation and Operation of Meters) Regulations, 2006, as amended from time to time, hereinafter referred to as the “Metering Regulations.”

If electricity consumption by captive users involves an energy storage system (ESS), each ESS unit must have a separate interface meter with real-time communication capability with SLDC or DISCOM.

If a captive user intends to claim electricity consumption by its subsidiary or holding company, the respective subsidiary or holding company must install a separate interface meter with real-time communication capability with the SLDC or DISCOM.

In cases where a captive project is an integral part of a manufacturing industry and is located within the premises of that industry, the manufacturing unit must also have a separate interface meter with real-time communication capability with the DISCOM concerned.

For multiple generating projects connected at the same pooling substation and interfacing with the transmission licensee’s or the DISCOM’s network through a single connection, each generating project or designated captive generating unit must install a separate interface meter with real-time communication capability with the SLDC, DISCOM, or the qualified coordinating agency.

In February, the Central Electricity Authority and the Ministry of Power released the captive status verification procedure for captive power projects and their users located in more than one state.

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