The Telangana State Electricity Regulatory Commission (TSERC) has approved a reduced additional surcharge of ₹0.39 (~$0.0047)/kWh for open access consumers who avail power from any source other than the distribution companies (DISCOMs) of the state.

This is a 72% drop from the additional surcharge of ₹1.38 (~$0.017)/kWh applicable from October 1, 2022, to March 31, 2023.

The Southern Power Distribution Company of Telangana (TSSPDCL) and the Northern Power Distribution Company of Telangana (TSNPDCL) filed petitions for the determination of an additional surcharge to be levied on open access consumers for the first half (1H) of the financial year (FY) 2023-24

Background

The DISCOMs’ petitions proposed to recover an additional surcharge of ₹9.81 (~$0.119)/kWh from the open access consumers, calculated on the basis of slot-wise surrendered power and slot-wise open access power.

Later, the Commission issued a public notice inviting suggestions and objections from the stakeholders.

The state DISCOMs requested the Commission to consider any variation in fixed charges in the ensuing filings of the additional surcharge as and when the final audited accounts are available.

One of the stakeholders, in its submission, said that the DISCOMs’ proposal of the additional surcharge was very high. In fact, the proposal was more than the retail supply tariff and was against the interest of the consumers.

Another stakeholder said that the fixed charge claimed by the petitioners was incorrect. The DISCOMs had claimed the fixed cost for 1H of FY 2022-23 of ₹55.89 billion (~$683.46 million). The stakeholder had worked out the allowable fixed charges as ₹54.14 billion (~$662.06 million) against ₹55.89 billion (~$683.46 million).

The DISCOMs, in their response, said that they had already provided the complete breakup of the individual fixed cost of each generating station that has been considered in the determination of additional surcharge for 1H of FY 2023-24. All the details regarding plant availability and schedules and respective calculation sheets were provided, and the details were hosted on the DISCOMs’ website for access to the stakeholders.

Another stakeholder pointed out that the DISCOMs’ proposal was against the Ministry of Power’s Green Energy Open Access Rules, 2022.

The DISCOMs argued that removing the additional surcharge would result in licensees bearing excessive fixed costs associated with the power purchase agreement (PPA) signed for a long-term duration (25 years) on account of stranded capacity due to the switching of existing consumers. The additional surcharge helps in assuaging financial worries. Removal of such charges would put DISCOMs under pressure.

Commission’s analysis

On examination of 15-minute time-block data from April 2022 to September 2022, the Commission noted that the DISCOMs had averaged the 15-minute time-block data for the entire six-month period per the approved methodology.

Further, the Commission observed that the DISCOMs had purchased the energy under short-term purchases during certain time blocks when surplus capacity was available. The Commission opined that the short-term purchases during the availability of surplus capacity could not be attributed to stranded capacity due to the open access consumers. Accordingly, the Commission approved the capacity stranded due to open access as 64.87 MW against 78.10 MW provided by the DISCOMs.

The Commission said that average fixed charges worked out to be ₹6.5 million (~$79,487)/MW. Accordingly, the fixed charges for stranded capacity worked out to be ₹419.3 million (~$5.13 million).

Also, the Commission computed the transmission charges as ₹0.67 (~$0.008)/kWh.

Additionally, the DISCOMs had claimed open access sales of 213.29 MU pertaining to open access other than captive transactions from April 2022 to September 2022.

Considering the above parameters, the Commission arrived at the additional surcharge of ₹0.39 (~$0.0047)/kWh for six months from April 1, 2023, to September 30, 2023.

The Gujarat Electricity Regulatory Commission recently approved an additional surcharge of ₹0.76 (~$0.0092)/ kWh, which will apply to consumers availing power through open access from April 1, 2023, to September 30, 2023 period.

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