Telangana Electricity Regulatory Commission Approves ₹1.09/kWh Additional Surcharge For Open Access Consumers From October 2024

The Telangana Electricity Regulatory Commission (TGERC) has issued a ruling regarding the petitions filed by the Southern and Northern Power Distribution Companies of Telangana (TGSPDCL and TGNPDCL). These petitions sought approval for the imposition of an Additional Surcharge of ₹1.09/kWh on Open Access (OA) consumers for the second half of the financial year 2024-25, covering the period from October 2024 to March 2025.

The petitions were reviewed and admitted by the Commission, and the matter proceeded through a public consultation process. Public hearings were held on September 18, 2024, and September 27, 2024, during which stakeholders, including representatives from industry bodies, provided their input. Objections and suggestions primarily revolved around the applicability and calculation of the Additional Surcharge, the stranded capacity due to Open Access consumers, and concerns about excessive charges.

The key issue at the heart of the petitions was the recovery of fixed costs by TGSPDCL and TGNPDCL. When consumers opt for Open Access, they procure power from sources other than the distribution companies, leaving the distribution companies with unutilized or “stranded” capacity that they have already committed to purchasing from generators. To recover the fixed costs associated with this stranded capacity, the distribution companies proposed the levy of an Additional Surcharge on Open Access consumers.

The Commission undertook a detailed analysis of the filings, including data on stranded capacity, fixed charges, transmission and distribution charges, and demand charges recovered from Open Access consumers. After scrutiny, the Commission approved an Additional Surcharge of ₹1.09 per kWh, which is to be applied to all Open Access consumers of TGSPDCL and TGNPDCL from October 1, 2024, to March 31, 2025. This surcharge will not apply to certain categories of consumers, such as those using power from their own captive power plants or specific green energy sources.

Throughout the process, the Commission emphasized transparency and directed the distribution companies to ensure that relevant data and supporting documents were made accessible to the public and stakeholders. The Commission also required that future filings be accompanied by detailed financial reports and that computations be reconciled with audited accounts.

In its conclusion, the Commission reiterated the necessity of the Additional Surcharge to ensure the financial stability of the distribution companies, while balancing the interests of consumers who seek to benefit from Open Access. The ruling ensures that while consumers can continue to take advantage of competitive power supply options through Open Access, the distribution companies are compensated for the fixed costs they incur in maintaining infrastructure and power purchase agreements.

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