In response to a series of appeals and petitions, the Gujarat Electricity Regulatory Commission (GERC) has recently overhauled the methodology used to calculate the Additional Surcharge imposed on Open Access consumers. This crucial decision, reached following extensive consultations with various stakeholders and a series of legal proceedings, has far-reaching implications for the cost of electricity from 1st October 2023 to 31st March 2024.
The journey leading to this landmark decision traces its roots back to an order dated 12.03.2014, which intricately examined the applicability and computation methodology of the Additional Surcharge for open-access consumers. This directive triggered an appeal filed by Gujarat Urja Vikas Nigam Limited (GUVNL) and four State Owned Distribution Companies (DISCOMs), sparking further rounds of deliberations. The Appellate Tribunal for Electricity (APTEL) eventually disposed of the appeal on 01.10.2018, granting the petitioners the right to request a revision in the methodology for calculating the Additional Surcharge for forthcoming periods. Subsequently, GUVNL and the DISCOMs sought to amend the formula for computing this surcharge.
Concurrently, the Federation of Kutch Industries Associations and the Federation of Gujarat also filed petitions, seeking greater clarity and regulatory guidelines concerning the methodology for determining the Additional Surcharge. These petitions set the stage for GERC’s recent decision.
On 30.08.2022, GERC issued an order that brought about a comprehensive revision of the methodology governing the computation of the Additional Surcharge paid by Open Access consumers. This decision, set to take effect from 01.10.2022 onwards, drew heavily from data submitted by GUVNL, which was duly certified by the State Load Dispatch Center (SLDC) and Chartered Accountants.
Under the revised methodology, the Additional Surcharge was meticulously calculated at ₹0.87 per kWh, applicable for the period spanning from 1st October 2023 to 31st March 2024. This calculation took into account Transmission and Distribution (T&D) losses of 14.13%, derived from the lower of the normative T&D losses approved by the Commission for FY 2022-23 and the most recent trued-up T&D losses for all four State DISCOMs in FY 2021-22. Additionally, network-related costs, borne by Open Access consumers in the form of demand charges, were firmly set at 7.14%, aligning with the guidelines delineated in the order.
This freshly established Additional Surcharge rate of ₹0.87 per kWh will have direct ramifications for consumers of the four State Owned DISCOMs, namely DGVCL, MGVCL, PGVCL, and UGVCL, who procure power through Open Access from providers other than their respective DISCOMs.
This decision constitutes a pivotal development in the realm of Additional Surcharge regulation, as it seeks to strike an equitable balance between the interests of open-access consumers and the overarching financial stability of the power distribution sector. Furthermore, GERC’s commitment to a transparent and data-driven approach ensures that consumers and stakeholders remain fully apprised of the basis for these rate adjustments, promoting transparency and accountability within the power sector.
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