The Tamil Nadu Electricity Regulatory Commission issued draft guidelines on the procedure for verification of the status of captive generating plants in accordance to requirements in Rule 3 of Electricity Rules 2005. In the guidelines the Commission has clearly outlined the process for verification of status and has also suggested that the TANGEDCO launch a web-portal to manage the process of verification in a transparent manner. While we welcome the initiative of the Commission to streamline the processes for verification, there are some provisions where there is lack of clarity. Given that the number of captive users has increased significantly in the state, there could be impacts on regulated consumers and cash strapped DISCOMs as well.  Thus, there is also a need to monitor and analyse key trends in the captive power market in the state. In line with all these observations and concerns we made the following comments:

• Clarity is required on applicability of guidelines in case of captive generating plants with users outside the state or captive consumers obtaining power from generators in other states. This is especially a concern with respect to the process for verification of captive consumption outside the state for such plants and jurisdiction in case of dispute resolution.
• Whether the consumption considered for captive status verification includes transmission and distribution losses or is based on the final energy received by the consumers must be clarified.
• Commission must mandate the web portal to track compliance, consumption, generation and status of captive plants.
• The web portal must track information related to type of captive generator, captive consumer/s, and data related to captive generation, captive consumption, consumption deemed as open access sale in case of loss in captive status, transmission and wheeling charges paid, payment of penalties and shareholding patterns and changes in them.
• DISCOMs should publish quarterly reports that include relevant data related to all captive generating plants.