Goa allows captive power generation

Sandesh Prabhudesai
18 July 2000  

Industries can now come down to Goa to avail facilities of five-year income tax holiday and 10-year sales tax exemption, if it can generate the captive power of its own, without bothering much about the state-supplied electricity.

Putting a stop to frequent changes in the power policy proposals, the existing coalition government has now decided to give a green signal to the captive power generation plants, not only to consume it but even to sell it within the specified areas.

"The cabinet has already approved it and a notification is on the way", announced power minister Digambar Kamat in the Assembly late last night while replying to the budgetary debate regarding his department.

The announcement has come in the light of a situation where industrial development has literally come to a grinding halt following ban by the high court on new power connections since May 1998. It was later partially lifted in two instalments – in December last year and May this year – as per the availability.

Official records state that over 7500 applications are still pending for new connections, including 22 high tension and 126 low tension industrial connections besides around 1800 for the commercial purpose.

In spite of allowing commissioning of a mini private power plant of 50 MW by the Reliance Salgaoncar Power Company Ltd exactly one year ago, the state is still falling short of enough power as it continues to wheel in only 190 MW from the central power grid.

Despite knowing the poor power condition, the erstwhile Congress government had released almost 100 MW of power to several power guzzling steel rolling mills, which compelled the high court to intervene. Most of these units have now wound up after the Francisco Sardinha-led coalition government came down firmly on them.

Frequent changes in the governments since 1990 in the meanwhile had made mockery of the power policy. It was reversed every time the new group took over and governments kept on falling before any final policy could be framed. Even the new coalition government is yet to come out with its own policy.

But the Sardinha-BJP coalition appears more logical by deciding against private power generation as one mini plant has gobbled up all the profits of the power department. The state is annually spending Rs 150 crore for only 30 crore RSPCL units at the rate of Rs 4.50 per unit while only Rs 34 crore is spent to purchase 110 crore units from the NTPC at the rate of Rs 1.40 per unit.

The latest decision to allow area-specific captive power plants may thus also help in arresting the power crisis marginally, though its tariff for sale would ultimately be decided by the power regulatory commission while recovering five paise per unit towards generation.

According to power minister Kamat, the captive units would be given an option either to sell it directly or through the state grid by charging additional amount for the transmission. "Even the state may purchase power from them, but without signing any PPA", he clarifies.

While the captive power generation units up to 25 MW would be allowed by the local authorities, Kamat however also clarifies that the private generators will have to seek permission of the central electricity authority in case of more generation.

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