The Uttarakhand Electricity Regulatory Commission (UERC) has approved Uttarakhand Power Corporation’s (UPCL) additional surcharge of ₹1.14 (~$0.013)/kWh for open access power consumers.

The additional surcharge will be effective between April 1, 2024, and September 30, 2025.

Background

The petitioner, UPCL, approached the Commission to approve levying an additional surcharge of ₹1.2 (~$0.013)/kWh from April 2025 to September 2025.

The distribution company (DISCOM) said the increased surcharge to consumers procuring power through open access was justified since such consumers’ surrendered capacities led to stranded energy of 38.02 million units (MU).Stakeholders objected to UPCL’s proposal for an additional surcharge of ₹1.2 (~$0.013)/kWh, stating that, according to the Electricity Rules, 2005, the additional surcharge must not exceed 20% of the average supply cost.

They argued that the additional surcharge would not apply to open access consumers for the contract demand maintained. The rule also states that consumers are not liable to pay a demand surcharge for the maximum demand.

They contended hat UPCL is facing a power shortage and hence cannot claim the surrender of power.

UPCL also argued that the Electricity Rules, 2005 talks about cross-subsidy surcharge, not additional surcharge.

It added that it is meeting the deficit power by purchasing from energy exchanges, floating tenders, and banking arrangements. Due to openaccess power purchases, the DISCOM was forced to surrender its power and must bear the fixed cost of the stranded energy.

Commission’s Analysis

The Commission calculated the monthly surrendered power between April 2024 and September 2024 by taking the difference of power entitled with the power scheduled.

It also calculated the monthly stranded power by considering the lower of the quantum of open access power transactions and surrendered power.

The Commission observed that between April 2024 and September 2024, the DISCOM had 71 MU of stranded energy, equivalent to the power procured by consumers through open-access power transactions.

It noted that the petitioner had a total of 545.6 MU of entitled power and a total fixed cost of ₹535.1 million (~$6.2 million) from six of its generators. It also observed that the DISCOM endured distribution losses of 13% and transmission losses of 1.1%.

The Commission calculated the stranded power cost by considering the weighted average cost and stranded power due to open access drawal.

The Commission proposed the following additional surcharge for the next six months.

In October 2024, UERC determined an additional surcharge of ₹1.12 (~$0.013)/kWh for open access power consumers from October 1, 2024, to March 31, 2025.

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