Punjab Reduces Additional Surcharge Payable by Open Access Consumers to ₹1.16/kWh

The Punjab State Electricity Regulatory Commission (PSERC) has set additional surcharge payable by consumers availing power through open access sources in the state.

For open access consumers (partial and full) availing power beyond the contract demand maintained with the distribution licensee, the additional surcharge determined is ₹1.16 (~$0.016)/kWh. Partial open access consumers availing power up to the contract demand need to pay ₹0.83 (~$0.011)/kWh as the additional surcharge. The charges will be applicable from April 01, 2021, to September 30, 2021.

The earlier order dated December 9, 2020, was applicable from October 2, 2020, to March 31, 2021. During this period, for open access consumers (partial and full) availing power beyond the contract demand maintained with the distribution licensee, the additional surcharge was ₹1.23 (~$0.016)/kWh. For partial open access consumers availing power up to the contract demand, the charges were ₹0.86 (~$0.011)/kWh.

The Commission added that the additional surcharge would be levied on consumers within the Punjab State Power Corporation Limited’s (PSPCL) supply area.


PSPCL had filed a petition with the Commission, appealing it to determine the additional surcharge for open access consumers availing power from sources other than PSPCL for April 1, 2021, to September 30, 2021.

Background

PSPCL submitted supporting documents for the corresponding period last year and said that it had sufficient generating capacity to meet the entire power demand of its consumers, including open access consumers during the relevant period.

PSPCL, however, claimed that it was burdened by the fixed cost component, which was harming its financial interests. The distribution licensee argued that this financial load was, in turn, affecting the consumers in the state buying power from PSPCL. The distribution company (DISCOM) reasoned that imposing an additional surcharge for open access consumers in the state was needed to mitigate the crisis at hand.

Commission’s Analysis

After considering all the points elaborated by PSPCL, the Commission noted that as per the PSERC’s regulations, open access consumers had to pay an additional surcharge for receiving electricity supply from an entity other than the distribution licensee of his area.

The Commission further noted that the fixed cost obligations of the distribution licensee included:

  • The fixed costs payable to the generating companies for the capacity booked by the distribution licensee to meet its obligation to supply
  • The fixed costs for availing long-term open access for the supply of energy from the generating stations to the input point of the distribution licensee
  • The fixed costs of distribution business from the input point to the place of consumption of electricity at the consumer’s place

Further, the Commission observed that in the additional surcharge calculation submitted along with the petition, PSPCL had considered an additional surcharge of ₹0.93 (~$0.012)/kWh for partial open access consumers availing power up to the contract demand.

For open access consumers (partial and full) availing power beyond the contract demand maintained with the distribution licensee, the additional surcharge proposed was ₹1.22 (~$0.016)/kWh.

The Commission observed that the partial open access consumers availing power up to their approved contract demand were also paying fixed charges. However, open access consumers (full and partial) availing open access over and above their contract demand were not paying any fixed charges.

The PSERC stated that the cost of generation considered by PSPCL was based on the actual data during the first half (1H) of FY 2020-21. During 1H of FY 2020-21, various rebates in fixed costs were given to PSPCL by the central generating stations.

“The Commission is inclined to accept the fixed cost from central generating stations as submitted by PSPCL in the current petition while working out the fixed cost of generation. However, with regards to the fixed cost of own generation and distribution, we find it prudent to consider the fixed cost as approved in the tariff order of FY 2020-21,” the Commission noted.

Recently, the Tamil Nadu Electricity Regulatory Commission heard a petition filed by the distribution company and approved an additional surcharge of ₹0.70 (~$0.0093)/kWh, payable by open access consumers. The Tamil Nadu Generation and Distribution Corporation had requested an additional surcharge of ₹1.23 (~$0.016)/kWh.

The total installed capacity in the open access market as of December 2020 stood at almost 4 GW, with a project development pipeline of over 1 GW, according to Mercom India Research’s updated report, Open Access Solar Market in India -Key States. The report covers open access markets in key states like Karnataka, Andhra Pradesh, Telangana, Maharashtra, Uttar Pradesh, Haryana, Tamil Nadu, and Gujarat.