The Punjab State Electricity Regulatory Commission (PSERC) has approved an increase in the additional surcharge to ₹1.22(~$0.016)/kWh from ₹1.16 (~$0.015)/kWh for consumers to avail open access beyond their contract demand with the distribution company (DISCOM).

The Commission also set an additional surcharge of ₹0.88/kWh (~$0.012) for partial open access consumers to avail power over their contract demand.

The charges will apply from October 2021 to March 31, 2022. The additional surcharge will be levied on consumers within the Punjab State Power Corporation Limited’s (PSPCL) supply area.

In May 2021, PSERC set an additional surcharge of ₹1.16 (~$0.015)/kWh for open access consumers availing power beyond the contract demand. The additional surcharge for partial consumers to avail of open access beyond contract demand was set at ₹0.83 (~$0.011)/kWh.

In October 2021, the Commission extended the additional surcharge of ₹1.16 (~$0.015)/kWh payable by open access consumers until September 30, 2021, to the second half (2H) of the financial year (FY) 2021-22.

Background 

PSPCL submitted data for the corresponding period last year and said that it had sufficient power generating capacity to satisfy the total power demand of its consumers, including open access customers.

Therefore, if open access consumers sourced power from agencies other than PSPCL, a part of the generating capacity would remain stranded between October 2021 and March 2022.

In its petition, the state DISCOM said the burden of fixed cost adversely affected its revenue, which in turn was affecting consumers buying electricity from PSPCL. Therefore, it requested the Commission impose an additional surcharge for open access customers.

The DISCOM also published a notice for a public hearing of the petition in regional and national newspapers inviting objections and suggestions within 15 days. It had received an objection from Indian Energy Exchange (IEX).

In its response to IEX, PSPCL said the interstate transmission charges for medium-term or long-term open access consumers were not reimbursed to the state and were required to be included in the fixed cost of available capacity. The components of other charges (variable costs) were not part of the fixed costs.

The DISCOM also informed IEX that it had considered the fixed costs based on aggregated revenue requirement (ARR) of 2020-21 only in the tariff from FY 2021-22.

Commission’s analysis

After examining PSPCL’s submissions, the Commission noted that as per regulations, open consumers should pay an additional surcharge for receiving power supply from an entity other than the DISCOM of the consumers’ area.

The Commission also observed that the state DISCOM installed or contracted adequate generation capacity from various capacities to meet its obligation to supply power to consumers. For these power generation capacities, PSPCL bears fixed costs due to unavoidable contractual obligations.

The fixed cost obligations of PSPCL included:

• The fixed costs payable to the generating companies for the capacity booked by the distribution licensee to meet its supply obligations
• The fixed costs of distribution from the input point to the place of consumption of electricity
• The fixed costs for availing long term access for power supply from the generating stations to the input point of DISCOMs

The Commission noted that PSPCL revised the power purchase’s fixed cost to ₹41.45 billion (~$545.93 million) from ₹47.94 billion (~$631.41 million) mentioned in its original petition. The decrease was due to the ‘accidental’ inclusion of transmission and SLDC charges of ₹6.83 billion (~$89.97 million) in other charges by PSPCL.

“In its revised calculation sheet to determine additional surcharge, PSPCL has worked out the additional surcharge at ₹0.88 (~$0.012)/kWh for open access within the contract demand maintained with PSPCL and ₹1.22 (~$0.016)/kWh for full open access without any contract demand and partial open access above contract demand maintained with PSPCL,” the Commission noted.

The Commission said full and partial open access consumers do not pay any fixed charges to avail of open access above their contract demand. Therefore, different rates of additional surcharge for consumers depending on whether they were paying the fixed charges to DISCOMs or not required to be determined.

The regulator ruled that its latest order would override its September 30, 2021 order.

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