The Telangana State Electricity Regulatory Commission (TSERC) has approved an additional surcharge of ₹0.96 (~$0.013)/kWh for consumers sourcing power through open access from January 1 to March 31, 2022.

The Southern Power Distribution Company of Telangana Limited (TSSPDCL) and Northern Power Distribution Company of Telangana Limited (TSNPDCL) had sought an additional surcharge of ₹2.01 (~$0.027)/kWh for the first half (1H) of the financial year (FY) 2021-22 and ₹2.34 (~$0.031)/kWh for the second half (2H).

The Commission noted that although the DISCOMs were entitled to the additional surcharge sought for, such a high additional surcharge could hinder the competition that the Electricity Act advocated.

Background

The two DISCOMs had petitioned the Commission for a higher additional surcharge. But, they did not submit their filings to determine the additional surcharge for 1H FY 21-22 due to the state elections and the imposition of the lockdown to contain the spread of the Covid-19 pandemic.

The DISCOMs claimed fixed charges of ₹1.4 billion (~$18.72 million) for a stranded capacity of 219.76 MW for 2H FY 20-21 (the average stranded capacity multiplied by the average fixed charge of ₹6.4 million (~$85,612)/MW).

The DISCOMs also said they had paid ₹18.7 billion (~$250.14 million) as transmission charges and scheduled 35769.61 MU of power for 2H FY 20-21. Thus, the transmission and distribution cost was ₹1.53 (~$0.020)/kWh, i.e., ₹0.52 (~$0.0070)/kWh transmission cost plus ₹1.01 (~$0.014)/kWh distribution wheeling charges.

Based on the above, DISCOMs contended that the charges to be recovered from open access power consumers worked out to ₹578.4 million (~$7.73 million), and the net stranded charges to ₹1.98 billion (~$26.48 million). The sales projected for 2H FY 21-22 was 844.11 MU, and hence the additional surcharge amounted to ₹2.34 (~$0.031)/kWh.

The DISCOMs later approached the Commission, stating that they had considered provisional power purchase cost for arriving at the fixed cost paid to the generators during 1H and 2H of FY 20-21 as the statutory audit was under process. Subsequently, it was found that there was a variance in the power purchase cost based on the final audit report for FY 20-21. According to the revised calculation, the additional surcharge increased to ₹2.38 (~$0.032)/kWh.

Commission’s analysis

The Commission noted that the DISCOMs had submitted their filings to determine additional surcharge for 1H FY 21-22 in September 2021. It found the reasons cited by the DISCOMs for the non-submission to be unsatisfactory. Noting that the period 1H FY 21-22 has lapsed, the Commission said that it would not determine an additional surcharge for the period.

The Commission noted that the additional surcharge for 2H of FY 21-22, including fixed charges for stranded capacity, transmission charges, distribution charges, and open access sales, worked out to ₹2.38 (~$0.032)/kWh.

The Commission found while the DISCOMs were entitled to this additional surcharge, a high additional surcharge could hinder the competition that the Electricity Act advocated and go against the interests of consumers.

Thus, in a bid to draw an even-handed judgment, the Commission approved an additional surcharge of ₹0.96 (~$0.013)/kWh for consumers sourcing power through open access between January 01, 2022, and March 31, 2022.

The Gujarat Electricity Regulatory Commission recently revised the additional surcharge to ₹0.69 (~$0.009)/kWh payable by open access consumers from ₹0.51 (~$0.007)/kWh.

Earlier, the Tamil Nadu Electricity Regulatory Commission approved a petition filed by the distribution company for an additional surcharge of ₹0.70 (~$0.0093)/kWh, payable by open access consumers.

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