The Karnataka Electricity Regulatory Commission (KERC) has released the draft Karnataka Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2025.

Stakeholders can submit their comments and suggestions by February 15, 2025.

This draft follows the Karnataka High Court’s decision to strike down the previous Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules 2022 and the KERC (Terms and Conditions for Green Energy Open Access) Regulations, 2022.

The Court directed KERC to frame new regulations aligned with the National Electricity Policy and the tariff policy and to consider the interests of all stakeholders.

Eligibility Criteria for Open Access Applications

These regulations apply to all open access customers, including green energy open access customers, who have submitted applications to the state nodal agency on or after January 13, 2023, for short-term open access and on or after January 2, 2023, for long-term and medium-term open access.

The regulations cover the use of intra-state transmission systems and/or distribution systems within the state, including systems incidentally involved in inter-state electricity transmission.

Subject to the provisions of these regulations and system availability, open access customers are eligible to access the intra-state transmission system managed by the State Transmission Utility (STU) or any transmission licensee, and the distribution systems of distribution licensees within Karnataka.

Generating companies with existing power purchase agreements (PPAs) with a distribution licensee cannot avail open access for the capacity covered under the PPA except in compliance with its terms. Additionally, open access for such capacity (quantum of power) already granted remains subject to these terms.

Open access will be provided upon payment of Commission determined charges. Individuals or entities with completed captive generating projects are entitled to open access under Section 9 of the Electricity Act, 2003.

Non-captive consumers are eligible for open access under the following criteria:

• For high-tension consumers: A contract demand of 100 kW or above.
• For low-tension consumers: A sanctioned load of 100 kW or above, either through a single connection or multiple connections aggregating to 100 kW or more, located within the same electricity division of a distribution licensee.

Treatment of existing entities

Existing consumers and generators may continue to utilize open access under their current agreements or government policies for the specified duration, provided these agreements or policies do not conflict with the Electricity Act or the new regulations. They will also remain subject to applicable charges outlined in their agreements, as determined periodically by the Commission.

The new regulations will govern open access for any subsequent periods, including renewals following the initial term of the existing agreements. Requests for additional open access capacity by existing consumers or generators beyond their previous contract will be treated as a new open access application.

Procedure for grant of open access

The procedure for granting open access involves several steps with specified timelines.

Complete applications must be submitted to the state nodal agency in the prescribed format. The application date is considered the “zero date.” The state nodal agency will review the application within three working days. It will reject incomplete applications, specifying the deficiencies. The applicant must then submit a revised application.

Accepted applications will be forwarded to the STU or relevant licensees within five working days for system availability checks and verification of existing PPAs.

The STU or licensee must provide concurrence within 10 working days. Cases, including existing consumers or generators without additional load, may not require system studies. The state nodal agency must notify the applicant about the grant or rejection of open access within 15 working days. If rejected, reasons and a probable date for the grant must be provided.

Applicants granted open access must submit signed agreements within 20 working daysfailing which the open access will be canceled. The STU or licensee must submit signed agreements to the state nodal agency within 25 working days, failing which the agreement will be deemed approved. Wheeling of electricity will begin the day after the state nodal agency receives the signed agreement, with the same effective date applying to banking for eligible renewable energy projects.

Procedure for Applying for Day-Ahead Open Access Transactions

Applications must be submitted for day-ahead open access transactions via the state portal.

Applications received by the state nodal agency before 1:00 PM on the day preceding the scheduling day will be reviewed for system congestion. The state nodal agency will communicate approval or rejection to the applicant by 3:00 PM the same day via email or fax, ensuring no subsisting PPAs for the requested capacity exist.

Applicants must furnish a non-refundable processing fee of ₹1,000 (~$11.55)/transaction, either in cash, via demand draft, or through proof of electronic transfer, in favor of the state nodal agency.

Open access will be operationalized after payment of charges specified in the regulations or as the Commission determines. Payment must be made by 5:00 PM before the scheduling day.

If open access is denied, the state nodal agency will provide the applicant with the reasons for rejection.

Non-Utilization of Open Access Service by Open Access Customers

If a short-term open access customer cannot utilize the full or substantial part of the allocated  capacity for more than four hours, they must notify the respective state load dispatch centre (SLDC) and provide reasons. The customer may also surrender the allocated capacity. Short-term customers must still pay the full transmission and/or wheeling charges based on the initially reserved capacity and the reservation period.

Long or medium-term open access customers cannot relinquish or transfer their rights and obligations without approval from the state nodal agency. Any relinquishment or transfer will be subject to compensation payment equivalent to three months of open access charges.

The SLDC may cancel or reduce the allocated capacity of short-term open access if the customer underutilizes the capacity more than twice a month, with each instance lasting over two hours, or fails to notify the distribution licensee of their inability to utilize the allocated capacity. Such actions will be taken after issuing due notice.

Any surplus capacity resulting from a short-term open access customer surrendering capacity or the SLDC canceling/reducing it can be reallocated to other short-term open access customers. Allocation will be done in the order of pending applications based on the injection and drawal points.

Charges Overview

a) Transmission Charges

Inter-State Transmission System

The charges will be determined by the Central Commission as specified from time to time.

Intra-State Transmission System

• Long-Term and Medium-Term Open Access:

Transmission charges in ₹/MW/Month = (TTSC x 10^7) / (TCCx12)

TTSC: Total Transmission System Charges, the sum of the Annual Revenue Requirement (ARR) of transmission licensees, approved by the Commission, in ₹ crores.

TCC: Total Contracted Capacity for all Open Access customers (excluding short-term OA customers), in MW.

• Short-Term Open Access:

Transmission charges in ₹/MWh= (TTSC in (₹ crore)x 10^4)/(Energy Transmitted by Transmission Licensee during the year (MU))

TTSC is the Total Transmission System Charges for the Intra-State Transmission System.

b) Wheeling Charges
As determined by the Commission in tariff orders issued from time to time.

c) Cross-Subsidy Surcharge (CSS)
The cross-subsidy surcharge will be per the provisions of tariff policy notified by the Central Government under the Act. The following formula shall be adopted:

CSS (S) = T – [C/ (1-L/100) + D+ R]

T: Tariff payable by the relevant consumer category (including renewable purchase obligations).

C: Weighted average power purchase cost (₹/unit), including renewable purchase obligations.

L: Aggregate transmission, distribution, and commercial losses (%) at the relevant voltage level.

D: Aggregate transmission, distribution, and wheeling charges at the relevant voltage level.

R: Per-unit cost of carrying regulatory assets.

d) Additional Surcharge
Additional surcharge = cost of stranded power/open access energy in kWh.

e) Banking Charges

Banking is allowed monthly, subject to applicable charges determined by the Commission. Unutilized banked energy at the month’s end cannot be carried forward but is eligible for renewable energy certificates.

Energy banked during peak time of day (ToD) slots can be drawn during peak and off-peak ToD slots, whereas energy banked during off-peak ToD slots can only be drawn during off-peak periods. Banking charges are set at 8% of the banked energy or as the Commission determines.

Banked energy is computed slot-wise and day-wise, summed up at the month’s end.

f) Standby Charges
For outages of generators supplying open access consumers, the licensee will provide standby arrangements at 125% of the applicable energy charges (normal energy charges plus an additional 25%) as determined in the Commission’s tariff orders.

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