Plea against private power generators exploiting government funds

Allowing the plea moved by RN Sekar a retired chief engineer of Tangedco, the first bench comprising Chief Justice Indira Banerjee and Justice Abdul Quddhose ordered notice to the state-run power authority returnable by April 13. 

The petitioner had contended that as per the policy set out by the Union Ministry of Power in 2009, the projects classified as ‘Mega Power Projects’ would be required to supply power up to 85 per cent of their capacity to distribution companies like Tangedco through long term power purchase agreements in tune with the National Electricity Policy 2005. 

But now, private power generators established under ‘mega power policy’ of the state, are converting their plants into a ‘captive power plant’ (utilising a majority of the power produced for their own purpose), after availing of monetary benefits to the tune of Rs 100 crore from the government. 

Moreover, the purpose and objective of ‘mega power projects’ was to substantially bring down tariffs from the identified mega projects to provide relief to state electricity boards from raising tariffs. 

But at the same time, if such private plants are allowed to convert into captive plants, the regulatory body would not have any hold on the tariff, the petitioner said. 

Exploiting the situation are companies like IL and FS Tamil Nadu Power Company Limited, which along with receiving monetary benefits, have also availed of customs and excise duty concessions based on its categorisation as a provisional mega power project plant. 

The petitioner further alleged that Tangedco has grossly failed to exercise its statutory functions and take action against such conversion, particularly that of IL and FS into a captive power plant.