The Punjab State Electricity Regulatory Commission (PSERC) has set an additional surcharge of ₹1.29 (~$0.015)/kWh for full open access consumers and partial open access consumers beyond their contract demand within the area of supply of the Punjab State Power Corporation (PSPCL).

The Commission has also set an additional surcharge of ₹0.92 (~$0.011)/kWh for partial open access consumers to avail power up to their contract demand maintained with the distribution licensee.

The additional surcharge will apply to power purchased from April 1, 2023, to September 30, 2023.

Background

PSPCL had filed the petition for determination of applicable additional surcharge from April 1, 2023, to September 30, 2023, to be levied on the open access consumers receiving electricity from sources other than PSPCL.

The data submitted indicated that PSPCL has sufficient generating capacity to meet the power demand of consumers, including open access consumers, during the specified period. However, when open access consumers source power from providers other than PSPCL, part of this generating capacity may remain unused, causing it to become stranded.

The provisions for additional surcharge are outlined in the Tariff Policy and Regulation 27 of the PSERC (Punjab State Electricity Regulatory Commission) (Terms and Conditions for Intra-State Open Access) Regulations, 2011. This surcharge is meant to compensate the distribution licensee (PSPCL) for stranded generation capacity due to universal supply obligations.

PSPCL emphasized that the burden of fixed costs negatively affects its financial interests. This, in turn, affects consumers who purchase power from PSPCL. Therefore, determining the additional surcharge was necessary to address the financial impact.

The petition was filed later than initially planned. As a result, the Commission had allowed continuing the additional surcharge provisionally as determined earlier for the period from October 1, 2022, to March 31, 2023, until the final order in the present petition was passed.

Commission’s analysis

The Commission observed that to meet its obligation to supply power, PSPCL had installed and contracted adequate generation capacities from various sources, and there was an obligation to bear fixed costs consequent to such contracts.

Since the additional surcharge is payable on the energy consumption measured at the consumer end, the Commission decided to consider the per unit fixed cost liability of power at the consumer end.

The Commission noted that partial open access consumers availing open access up to their sanctioned contract demand were also paying fixed charges to the licensee.

The state regulator noted that full and partial open access consumers availing of open access above their contract demand do not pay any fixed charges. It was prudent to work different rates of additional surcharge for different consumers depending on whether they were paying the fixed charges to the distribution licensee.

Also, PSPCL had worked out the additional surcharge at ₹0.92 (~$0.011)/kWh for open access consumers within the contract demand maintained with PSPCL and ₹1.29 (~$0.015)/kWh for full open access without any contract demand and partial open access over the contract demand.

In June, the Commission amended its intra-state open access regulations according to the center’s Green Energy Open Access Rules to encourage open access installations in the state.

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