State's power regulator upholds Gescom's plea

The Karnataka Electricity Regulatory Commission (KERC) has upheld the contention of the Gulbarga Electricity Supply Company (Gescom) and the Government that the Bellary-based JSW Steel Ltd. and JSW Energy Ltd. should pay electricity tax and surcharge to them.

Managing director of Gescom Munish Moudgil, who pleaded on behalf of the electricity supply company before the KERC in the case, said here on Thursday that the power regulator's order would generate over Rs. 90 crore as electricity tax to the State Government and crores of rupees as surcharge to Gescom for the financial year 2009-10 alone.

Mr. Moudgil said Gescom was calculating the tax and surcharge that it could claim from the two companies for the period 2005-06 to 2010-11. He said Gescom and the State Government had put before the KERC that the two industries set up captive power generation units and refused to pay electricity tax, contending that the power generated was for captive or self-consumption and not for commercial sale.

The companies also rejected the claim for electricity surcharge under Section 42 of the Electricity Act, 2003, on the same grounds.

Commercial use

However, Mr. Moudgil said the companies had allegedly violated the provisions and concessions given for units generating captive power and reportedly used the power generated for commercial purposes by supplying it to other industrial units.

According to the provisions of the Act, exemption from paying electricity tax and surcharge could be gained if the industry that established the captive generation unit used at least 51 per cent of the produced power in its unit.

In the case of JSW Steel and JSW Energy, the Gescom official said that besides not having utilised 51 per cent of power generated in their own industries, they had distributed the power generated to other industries in their industrial complex, which amounted to commercial sale.

  • The companies allegedly violated the provisions for units generating captive power
  • ‘KERC order will generate over Rs. 90 crore as electricity tax to the Government for 2009-10'