Top company sources said that Reliance-which has a 92.34 mw capacity CPP at Patalganga-will have to bear an additional burden of nearly Rs 53 lakh on account of the new levy. At present, it has been paying a duty of about Rs 31 lakh for the sale of power to TFIL and Nocil.

The Ispat group-which has a 354 mw captive power plant at Dolvi, Raigad- will have to shell an additional amount of Rs 3 crore.

The cash-starved government has predicted that it would mop up an additional revenue of around Rs 22 crore by charging the electricity duty on the generation for self consumption.

So far, of the total 68 captive power projects with a total capacity of 1,580 mw, 38 projects with a capacity of 573 mw have been commissioned in the state.

Reliance has said that the 30 paise per unit electricity duty is high compared to 18 paise per unit for Maharashtra State Electricity Board (MSEB) consumers.

The Confederation of Indian Industry (CII) which has also taken up this issue with the state government has said that this move will "affect large number of captive power plants with a capital investment of over Rs 50,000 crore eroding their economic viability and driving them to closure".

Reliance, in its presentation to the state government, has said that sudden change in the policy was not rational and it will create unviable situation for the industry. "With high operating and maintenance costs for CPPs any further increase in cost by way of 30 paise electricity duty per unit is not sustainable," it added.

Reliance has further said that the government move is "against encouraging the industrial growth in Maharashtra". It has urged the state government to honour the commitment on electricity duty based on which the CPP policy has been formulated in the past.

Reliance went on to add that wheeling of power from CPP is allowed only during peak hours which helps MSEB to meet its much needed power demand. Wheeling of power from Patalganga plant leads to saving in transmission losses in the MSEB network.

In addition to this, about 17.8 lakh units are provided to MSEB at free of cost which works out to about Rs 62 lakh worth of power per month and Rs 7.5 crore annually.

CII, which has shared the industry view, has reiterated that the existing CPPs should continue to be exempted from the electricity duty. Moreover, the government should not impose this fresh levy on those units who have been granted no objection certificate and have taken effective steps for setting up CPPs.