The Telangana State Electricity Regulatory Commission (TSERC) has increased the additional surcharge for open access consumers to ₹1.98 (~$0.0237)/kWh for the second half (2H) of the financial year (FY) 2023-24.

The new rate, effective from October 1, 2023, to March 31, 2024, is a 408% increase from ₹0.39 (~$0.0046)/kWh set by the Commission for the first half (1H) of the year.

The Southern Power Distribution Company of Telangana (TSSPDCL) and the Northern Power Distribution Company of Telangana (TSNPDCL) had filed petitions for the determination of the additional surcharge to be levied on open access consumers for 2H of FY 2023-24.

Background

In 2020, the Commission had issued an order to implement a mechanism for the determination of stranded capacity and framing the terms and conditions for the levy of additional surcharge on open access consumers.

The state DISCOMs, as directed by the Commission, published a public notice in daily newspapers on July 11, 2023. It was also notified in the public notice that objections or suggestions, if any, on the filings may be filed before August 2, 2023.

In response to the public notice issued by the DISCOMs, 17 stakeholders submitted their comments.

Based on the revised methodology, the state DISCOMs submitted that the additional surcharge proposals for 2H of FY24 were made by considering the actual parameters pertaining to 2H of FY23.

The DISCOMs added that the additional surcharge in all other states was higher than the approved additional surcharge for 1H of FY24 in Telangana by 92% to 380%.

Commission’s analysis

The Commission’s examination of the DISCOMs’ 15-minute time-block data for the period spanning from October 2022 to March 2023 revealed that the DISCOMs had calculated the average data on a daily and monthly basis, as well as over a six-month period. This approach of averaging data at intermittent intervals was not in line with the approved methodology.

Consequently, the Commission approved the long-term available capacity by averaging the 15-minute time-block data over the entire six-month period, resulting in a capacity of 9,198.60 MW, which differed from the claimed 9,191.58 MW.

It noted that the DISCOMs had engaged in short-term energy purchases and the sale of surplus power in the market during specific time blocks when surplus capacity was available.

Consequently, the calculation of stranded capacity was determined by netting these short-term purchases and surplus power sales during each time block. As a result, the approved stranded capacity due to open access was determined to be 46.22 MW, which differed from the initial claim of 47.42 MW.

Charges for Stranded Capacity

The state DISCOMs had initially reported fixed charges of ₹65.74 billion (~$789.41 million) were paid from October 2022 to March 2023. However, the Commission took note of the total fixed charges incurred by the DISCOMs for FY 2022-23, which amounted to ₹112.89 billion (~$1.36 billion). The Commission had already factored in ₹55.89 billion (~$671.13 million) of these charges when determining the additional surcharge for the first half of FY 2023-24.

As a result, the balance of ₹56.99 billion (~$684.34 million) was allocated towards covering the fixed costs of the DISCOMs for 2H of FY 2023-24. This calculation yielded an average fixed charge of ₹6.2 million (~$74,450)/MW.

Consequently, the Commission calculated the average fixed charges to be ₹286.4 million (~$3.44 million).

Transmission Charges

The state DISCOMs had submitted a request for transmission charges amounting to ₹24.84 billion (~$298.28 million) covering the period from October 2022 to March 2023. The Commission approved this amount.

During this period, the scheduled energy claimed by the DISCOMs was 39.635 BU. The Commission, however, observed that the total energy scheduled for DISCOMs for the FY 2022-23 was 75.311 BU. When calculating the additional surcharge for the first half of fiscal year 2023-24, the Commission had already factored in 35.288 BU of this energy. Consequently, the balance of 40.022 BU was considered the scheduled energy of DISCOMs for the second half of FY 2022-23.

As a result of this calculation, the Commission determined the transmission charges to be ₹0.62 (~$0.0075)/kWh, which differed from the initial claim of ₹0.63 (~$0.0076)/kWh.

Distribution Charges

The Commission worked out the distribution charges of ₹0.18 (~$0.0022)/kWh by considering the distribution charges of the HT network, i.e., 11 kV and 33 kV.

The total transmission and distribution charges per unit worked out to be ₹0.80 (~$0.0096)/kWh.

Accordingly, the transmission and distribution charges payable by open access consumers worked out to be ₹1.376 billion (~$16.57 million).

Demand Charges

The state DISCOMs had collected demand charges amounting to ₹1.863 billion (~$22.37 million) from open access consumers. The Commission noted that it was reasonable to exclude the revenue recovery related to the Low-Tension (LT) network because the distribution charges for the LT network are not factored into the expenditure calculations. Consequently, the Commission has determined that ₹1.401 billion should be considered the demand charges, excluding the LT network cost recovery portion.

The regulator instructed the state DISCOMs to calculate the total demand charges recovered for the HT network only, excluding the LT network cost recovery, in their future filings for additional surcharges.

Open Access Sales

Initially, in the filings, the DISCOMs had claimed the open access sales as 129.14 MU. However, in the additional information, the DISCOMs had furnished the open access sales, other than captive transactions, from October 2022 to March 2023 as 132.30 MU. The Commission found this to be in order.

Considering the above factors, the Commission approved the additional surcharge for 2H of FY 2023-24 as ₹1.98 (~$0.0237)/kWh.

Last month, TSERC issued the draft Intrastate Open Access Regulations 2023, allowing consumers with a contracted demand or sanctioned load of 100 kW or higher to avail of green energy open access.

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