TANGEDCO Directed to Levy Additional Surcharges for Actual Open Access Energy Drawn

High voltage power electrical pylons with sunset.

The Tamil Nadu Electricity Regulatory Commission (TNERC) has ruled that the additional surcharge should be levied only on the quantity of the actual drawn open access power in line with the TNERC Intra-State Open Access Regulation 2014.

Background

Birla Carbon India, a captive power producer, sells power to various third-party consumers under several open access agreements. It has been remitting charges payable to TANGEDCO and the Tamil Nadu Transmission Corporation Limited (TANTRANSCO).

According to TNERC Intra State Open Access Regulation 2014, open access consumers should be billed for an additional surcharge per unit basis on the actual drawn during the month through open access. However, TANGEDCO raised invoices using the amount of units scheduled.


Birla Carbon India said there is a clear difference between the scheduled energy and the actual energy drawn by a consumer as there is a significant amount of energy lost in the form of transmission and distribution losses, line losses, etc.

The company said consumers are penalized with heavy charges. TANGEDCO levied an additional surcharge on the contracted and scheduled quantity instead of the actual energy drawn by open access consumers.

It issued a letter to TANGEDCO seeking an appropriate change in the billing and provided all details and the legal position. However, the state DISCOM continued to act contrary to the regulations leaving the company with no option but to approach the Commission.

The state load dispatch center (SLDC) approved and contracted 16 MW of energy to Hyundai Motors, a third-party consumer of Birla Carbon India. SLDC also approved 16.38 MW of energy with 11,904,000 units to Hyundai Motors. However, Birla Carbon India supplied 10,848,820 energy units to Hyundai Motors. TANGEDCO levied an additional surcharge of ₹8.53 million (~$113,567) at ₹0.70 (~$0.093)/kWh on Hyundai for 12,189,228 units considering losses too.

TANGEDCO supplied 1,055,180 units on top of Birla Carbon’s supply to Hyundai Motors. TANGEDCO also charged the additional surcharge as per the tariff order and Open Access Regulation in the August 2021 Current Consumption bill. Through this, it gained ₹756,323 (~$10,700) as additional revenue from the short supply units by burdening the consumer and generator.

Therefore, the company filed a petition requesting the Commission direct the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) to levy an additional surcharge only on the actual energy drawn during the month through open access.

TANGEDCO’s response 

The state DISCOM considered open access energy consumption for additional surcharge instead of scheduled open access energy. It also submitted that an additional surcharge should be levied only on the actual energy utilization.

However, Indian Energy Exchange Limited and Tamil Nadu Spinning Mills’ Association objected to the above methodology.

After considering suggestions, the Commission passed an order dated April 15, 2021. The order stated that open access consumers should pay the additional surcharge at ₹0.70 (~$0.0093)/kWh on the quantity of energy scheduled by them.

TANGEDCO followed the order without any deviation and billed the additional surcharge for the scheduled energy.

Commission’s analysis

After examining submissions made by both parties, the Commission noted that open access consumers are bound to pay the cross-subsidy surcharge and additional surcharge as per the TNERC Intra State Open Access Regulation.

The state regulator noted that it adopted the method followed by Gujarat to include scheduled open access energy to calculate an additional surcharge in its previous order dated April 15, 2021.

In the case of Hyundai Motors, TANGEDCO levied an additional surcharge on the approved quantity of power for August 2021.

However, the difference in additional surcharge arises due to the difference between the scheduled energy and the actual energy drawn by a consumer. A significant amount of energy is lost due to transmission and distribution losses, line loss, etc.

Therefore, the Commission opined that the additional surcharge should be levied only on the quantity of power actually drawn in line with the TNERC Intra-State Open Access Regulations 2014.

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