Telangana Approves Additional Surcharge For Open Access Consumers

Telangana Approves Additional Surcharge For Open Access Consumers

The Telangana State Regulatory Commission (TGERC) has approved an additional surcharge of ₹1.09 (~$0.012) per kWh for open access consumers for the second half (2H) of the financial year 2024-25. This surcharge will apply to the amount of electricity scheduled through open access, except for consumers wheeling power from captive power projects.

In September 2020, TGERC initiated a process for determining the additional surcharge for open access consumers, directing distribution companies (discoms) to submit relevant filings. The discoms are responsible for supplying power, and the additional surcharge helps cover their fixed costs related to stranded generation capacity, which occurs when open access consumers bypass discoms to procure power from other sources.

For the second half of FY 2025 (October 2024 to March 2025), the discoms filed petitions, calculating that the average stranded capacity due to open access use was 23.21 MW. They estimated fixed charges paid to generators at ₹63.92 billion (~$761.24 million) for this period. This results in fixed charges of ₹27 million (~$83,365) per MW of capacity.

TGERC approved a slightly higher stranded capacity of 25.19 MW, against the 23.21 MW claimed by the discoms. Fixed charges for the stranded capacity were recalculated as ₹166.9 million (~$1.98 million). After auditing, the commission also revised the transmission charges from ₹31.98 billion (~$380.86 million) to ₹30.66 billion (~$365.14 million). The total transmission and distribution (T&D) costs were determined to be ₹0.8396 (~$0.01) per kWh.

Discoms’ demand charges from open access consumers were ₹1.61 billion (~$19.17 million). Following adjustments based on Commission guidelines, the net demand charges were calculated at ₹1.19 billion (~$14.17 million). Based on all inputs, the final stranded charges were set at ₹72.2 million (~$859,859), and the approved surcharge for 2H FY 2025 was set at ₹1.09 (~$0.012) per kWh.

The surcharge does not apply to open access consumers using power from captive projects, green energy sources, or waste-to-energy projects, the TGERC order said.