The Karnataka Electricity Regulatory Commission (KERC) has stayed the imposition of grid support charges on captive power projects, including rooftop solar projects, that comply with Section 9 of the Electricity Act, 2003, and the Electricity Rules, 2005.

The order comes after stakeholders submitted multiple representations, arguing that grid support charges imposed by electricity supply companies are inconsistent with the Electricity Act 2003 and may discourage captive power generation investments.

The Commission noted that captive generation is governed by section 9 of the Electricity Act, 2003, which allows any person to establish, operate, and maintain a captive generating project.

The Act promotes captive generation to improve energy security, ensure supply reliability, and reduce grid dependency.

KERC directed the distribution and transmission licensees to refrain from imposing these charges until after it determines them.

The Commission decided to examine the issue of levying such charges and has not yet determined any support or parallel operation charges.

In November last year, the Commission approved an additional surcharge of ₹1.40 /kWh (~$0.017) for consumers availing power through open access for the financial year 2023-24. It  reduced the additional surcharge for all open-access consumers procuring electricity from renewable sources from ₹1.48 (~$0.018)/kWh to ₹0.70 (~$0.0084)/kWh. The additional surcharge does not apply to captive consumption.

In March 2024, the Commission reduced the retail electricity tariff for commercial and industrial consumers of high-tension categories in the financial year 2024-25 to retain customers resorting to private power purchases. The retail tariff for industrial consumers was lowered by 6.8% to ₹6.90 (~$0.083)/kWh, while the tariff for commercial consumers was reduced by 13.5% to ₹8 (~$0.096))/kWh. The revised tariff will be applicable from April 1, 2024.

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