The Maharashtra government has raised the maximum electricity duty charged on captive power plants by around four times. Captive plants are units that generate power for a respective company’s consumption.
The current duty is 40 paise per unit under the Bombay Electricity Duty Act, 1958. On Monday, it was increased to Rs1.50 per unit. The Cabinet asked the Governor to promulgate an ordinance to this effect.
The decision irked industry associations, which challenged the state to give them uninterrupted 24x7 supply round the year before raising the duty on captive power. Though chief minister Prithviraj Chavan said the decision intended to garner more revenue for the state, experts felt it was done primarily to rescue the state power distribution company Mahavitaran.
Open access systems allows a consumer, who needs 1 megawatt or more daily, to buy supply from sources of his choice. Use of captive power by industries hit Mahavitaran’s business, especially its cross-subsidy module in which it charges industries more than the average rates to offer cheaper rates to the domestic and economically weaker consumers. The state had encouraged the use of captive power when it was power deficient.
The duty will be applicable to renewable energy like captive wind power plants (1500MW) and cogeneration plants (250MW) of sugar factories. Energy secretary Vidhyadhar Kanade said, “We have raised electricity duty and we will amend the relevant act.”
SL Patil, secretary general of Thane Belapur Industries Association (TBIA), Asia’s largest industrial corridor, strongly opposed the hike.
“Actually, captive producers should get benefits as they take significant load off the state’s beleaguered company,” he said.