The Punjab State Electricity Regulatory Commission (PSERC) has issued separate additional surcharge rates for full and partial open access power consumers.

The Commission set ₹1.29(~$0.015)/kWh as an additional surcharge payable by full open access consumers and partial open access consumers, including green energy open access consumers, for availing open access beyond the contract demand maintained with the distribution licensee.

It also set ₹0.89(~$0.010)/kWh as the additional surcharge payable by partial open access consumers, excluding green energy open access consumers for availing open access up to the contract demand maintained with the distribution license.

The additional surcharge will be levied on consumers who purchase open access power from sources other than Punjab State Power Corporation (PSPCL). The additional surcharge’s applicability is subject to the condition that PSPCL’s contracted capacity remains unused during the period.

Background

PSPCL had filed a petition to determine the applicable additional surcharge from April 1, 2024, to September 30, 2024. This surcharge was to be imposed on open-access consumers who receive electricity from sources other than PSPCL.

PSPCL noted that it has adequate generating capacities available to meet the entire power demand of its consumers, including open-access consumers, during the relevant period.

If open-access consumers source power from other sources, PSPCL said that part of the available generating capacity would likely remain stranded from April 2024 to September 2024.

It added that the burden of fixed costs adversely affects PSPCL’s financial interest and impacts its consumers’ purchases.

According to PSPCL, the additional surcharge for April 1, 2024, to September 30, 2024, was to be made public before April 1, 2024.  However, it failed to file the petition on time, and the Commission allowed the continuation of the additional surcharge determined in the order passed on October 6, 2023.

PSPCL filed the petition on June 11, 2024. The Commission observed discrepancies in the figures submitted by PSPCL and asked them to be rectified.

PSCPL calculated the additional surcharge with corrected figures at ₹1.29 (~$0.015)/kWh for full open access and ₹0.89(~$0.010)/kWh for partial open access against ₹1.55(~$0.018)/kWh for total open access consumers and ₹1.15(~$0.013)/kWh for partial open access consumers submitted in the original petition.

As per Regulation 27 of the PSERC, an open access consumer receiving electricity from an entity outside the distribution licensee area must pay the distribution licensee an additional surcharge on the wheeling charges, wheeling charges, and cross-subsidy surcharge.

This additional surcharge will become applicable only if the licensee’s obligation in terms of power purchase commitments has been and continues to be stranded or if there is an unavoidable obligation and incidence to bear fixed costs consequent to such a contract.

The distribution licensee must indicate the quantum of such stranded costs and the period over which they would be stranded. The Commission will scrutinize the statement of calculation of fixed cost submitted by the distribution licensee and determine the amount of additional surcharge.

Such additional surcharges will not be levied if distribution access is provided to a captive generation project to carry the electricity to the user destination.

Further, the additional surcharge will not be applicable for green energy open access consumers if such a consumer is paying fixed charges.

An additional surcharge will also not be applicable if electricity is produced from offshore wind projects commissioned up to December 2032 and supplied to the open access consumers.

The additional surcharge will not be applicable if green energy is utilized to produce green hydrogen and ammonia.

Provided that consumers, including green energy open access consumers taking open access over and above the sanctioned contract demand as per the provisions of Regulation 31 (2) of the PSERC OA Regulations, 2011, shall be liable to pay Additional Surcharge as payable by Full open access consumers for availing open access beyond the contract demand maintained with the distribution licensee as determined by the Commission under these Regulations.

The Commission shall determine the additional surcharge.

Consumers using open access exclusively on the interstate transmission system or through dedicated lines outside the licensee’s transmission system must also pay the additional surcharge.

Commission’s Analysis

The Commission observed that to meet its obligation to supply, PSPCL has installed/contracted adequate generation capacities from various sources, and there is an unavoidable obligation and incidence to bear fixed costs consequent to such contracts.

It noted that the licensee’s responsibility regarding existing power purchase commitments has been and continues to be stranded.

The fixed cost obligations for the distribution licensee comprises of costs payable to the generating companies for the capacity booked by the distribution licensee to meet the obligatory supply, costs for availing long-term access, and fixed costs of distribution (wheeling and retail infrastructure).

The regulator noted that since the additional surcharge is leviable and payable on energy consumption measured at the consumer’s end, it decided to consider the per-unit fixed-cost liability of power at the consumer’s end.

The Commission observed that partial open access consumers availing open access up to their sanctioned contract demand are also paying fixed charges as per the tariff schedule. Total open-access consumers do not pay any fixed charges. Further, the partial open access consumers, for availing open access over and above their contract demand, do not pay any fixed charges.

The Commission decided it is prudent to determine different rates of additional surcharge for consumers depending on whether they are paying the fixed charges to the distribution licensee.

The Commission also 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 PSPCL ‘s supply area.

In 2023, PSERC extended the validity of the additional surcharge of ₹1.16 (~$0.016)/kWh payable by open access consumers until September 30, 2021, to the second half of the financial year 2021-22.