Additional Surcharge for Open Access Projects in Uttarakhand Raised to ₹1.14kWh

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Uttarakhand Electricity Regulatory Commission (UERC) has revised the additional surcharge to ₹1.14 (~$0.013)/kWh for consumers sourcing power through open access from October 1, 2022, to March 31, 2023.

This is a 6.5% increase from the additional surcharge of ₹1.07 (~$0.012)/kWh, applicable from April 1, 2022, to September 30, 2022.

Uttarakhand Power Corporation (UPCL), in its petition to the Commission, had sought an additional surcharge of ₹1.19 (~$0.014)/kWh for the second half (2H) of the financial year (FY) 2022-23.

The states usually issue changes to additional surcharges annually to avoid confusion amongst the industry stakeholders and help in effective planning.


The bi-annual revision of the additional surcharge by Uttarakhand would directly reflect on the net landed cost for the developers.

Background

In its petition, the UPCL pointed out that 5.32 million units (MU) of open access energy was drawn by the consumers at the state periphery from October 2021 to March 2022 and that 5.32 MU was the total stranded energy due to open access.

UPCL claimed that the average fixed cost at the state periphery is ₹1.02 (~$0.012)/kWh. In comparison, the average fixed cost at the consumer end after considering approved Power Transmission Corporation of Uttarakhand (PTCUL) losses at 1.40% and distribution losses at the rate of 13.75% is ₹1.20 (~$0.014)/kWh.

UPCL proposed that the additional surcharge for October 1, 2022, to March 31, 2023, must be ₹1.19 (~$0.014)/kWh. This was arrived at by the calculation – average fixed cost at the state periphery multiplied by average fixed cost at the consumer end after considering approved PTCUL losses and distribution losses divided by the open access energy.

A public notice inviting comments from the stakeholders on UPCL’s petition was published.

In response to the public notice, Indian Energy Exchange (IEX) stated that the levy of an additional surcharge would make the open access market uncompetitive. It is not in line with the National Tariff Policy, which emphasizes the objective of promoting open access while ensuring that charges and conditions levied for such open access do not make it uncompetitive. IEX had stated that the total stranded energy entitled is 5.321 MU, as against the 5.683 MU used in the computation of the additional surcharge by UPCL.

UPCL admitted a summation error in the computation of total energy entitled at the state periphery and requested the Commission consider 5.321 MU instead of 5.683 MU.

Commission Analysis

The Commission calculated stranded power, energy received, and open access power at the consumer end by considering distribution losses as 13.75% and transmission losses as 1.40% into account.

For arriving at the stranded cost of power due to open access consumers from October 1, 2021, to March 31, 2022, the Commission considered the weighted average fixed cost and the amount of stranded power due to open access drawl. After that, the Commission considered the recovering stranded cost over the next six months, i.e., from October 1, 2022, to March 31, 2023.

After analyzing the data provided by UPCL, the Commission stated the applicable additional surcharge for October 2022 to March 2023 should be ₹1.14 (~$0.013)/ kWh.

The Commission ruled that the new additional surcharge would be applicable for consumers sourcing power through open access from October 1, 2022, to March 31, 2023.

In May, UERC announced the generic tariff for solar, solar thermal, and grid-interactive rooftop and small solar projects to be commissioned in FY 2022-23. It approved the benchmark capital cost of ₹9.08 million (~$109,699)/MW and ₹13.70 (~$0.166)/kWh for solar and solar thermal projects commissioned on or after April 1, 2022.

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