Tamilnadu Spinning Mills Association

#2, Karur Road, (Near Beschi College), Modern Nagar, Dindigul - 624 001. India. Phone: +91 451 6454666, 6454667, 6454668, Fax: +91 451 2433637 Email: chiefadvisor@tasma.in , cdmhead@tasma.in Website: www.tasma.in Society Regn. No. 330/97, TU Regn. No. 356/10

To

Date: 07.05.2012

Shri.P.Uma Shankar, Secretary, Ministry of Power, Govt. of India Shram Shakti Bhavan, Ministry of Power, New Delhi 110 001 Most Esteemed Sir, Sub: Amendment of the Indian Electricity Rules 2005-Proposal submitted. ***** We are an Association of yarn spinning mills in Tamilnadu having 455 spinning mills as members and we are the premium Association in the country to have such a large strength of members the whole of the country. Our members in addition to their spinning mills, have contributed to the green energy by installing sufficient number of windmills in feasible areas to harness the wind power for their power requirement under wheeling arrangement if the TANGEDCO/TNEB by paying suitable wheeling charges as fixed by the TNERC from time to time. Few of our members have installed wind turbines and they are selling the power to the TANGEDCO at the tariff rate fixed by TNERC from time to time. However, due to the financial crisis experienced by the TANGEDCO, the entities selling power to TANGEDCO are not getting the payments even after the period of 14-16 months. Due to this trend, the interest to go for wind installations are becoming less and less nowadays. As per the Notification issued vide GSR 379(E), dated 08.06.2005, published in the Gazette of India, Extra., Pt.II, Sec.3(i) dated 08.06.2005, the Government of India has issued orders notifying the Indian Electricity Rules 2005. According to Rule 3, the requirements of Captive generating Plant was fully defined. According to the same, by proviso Clause 3(1)(a)(i)(ii), it has been made as follows: (1) No power plant shall qualify as a Captive Generating Plant under Section 9 read with Clause (8) of Section 2 of the Act unless(a) In case of a power plant(i) Not less than twenty six per cent. Of the ownership is held by the captive user(s) , and

(ii) Not less than fifty one per cent. Of the aggregate electricity generated in such plant, determined on an annual basis, is consumed for the captive use: From the above, it could be seen that only when an entity has 26% of the ownership in a Captive Generating Plant, it can captively consume the power as captive power subject to further condition that it should consume 51% of the electricity generated in a year. We feel that the above definitions are applicable to larger Captive Generating Plants having capacities in MW. But however, as there is no specific provision available for the wind power projects in KW capacities, the authorities are relying up on the only definition available and are refusing to allow Captive Consumption of the energy generated by small windmills on the reason that the consumer of the energy is not having 26% ownership on the windmill. This has made the small investors in windmills to sell the energy only to the State Utilities or Boards which are paying very less for such energy and that too with high delays of more than one year or so. Hence, this 26% ownership is a great impediment in the captive consumption pattern in small wind projects and this needs to be reconsidered at this juncture of having a great demand and supply gap in electricity everywhere. Hence, we suggest that the pre-condition of 26% ownership may be relaxed to windmills alone which are not very big Captive Generating Plants. Hence, the Rules may be relaxed to the extent as follows: Proposed amendment: Provided that in case of wind energy generators, if the owner of the wind energy generator happens to be a Director of the consuming Company, or a Partner of a consuming firm or having any financial stake or vice versa is eligible for captive consumption of the energy generated through the concerned wind energy generator. Further, the explanatory Clause in respect of registered Co-operative Societies provided may also be amended as follows: Existing Provision: Provided that in case of power plant set up by registered co-operative society, the conditions mentioned under paragraphs (i) and (ii) above shall be satisfied collectively by the members of the co-operative society: Proposed amendment: "[OR] in the case of the facilities of power generation when owned individually by the members of the Registered Cooperative Society, they can be spared for captive consumption by or among other members of the same Registered Cooperative Society subject to the minimum requirement of para (ii) above."

If the above amendments are considered and amendments are issued, this will help a long way to boost the wind energy investments still more in the States having sufficient wind sources and accordingly, the share of generation of clean and green power may go up manifold. We solicit the benign orders of the Hon'ble Secretary at the earliest possible. Thanking You, Yours Truly, Dr.K.Venkatachalam Chief Advisor Copy to: The Secretary, Ministry of New and Renewable Energy, Block-14, CGO Complex, Lodhi Road,New Delhi-110 003,