The Uttarakhand Electricity Regulatory Commission (UERC) issued an order on April 8, 2025, regarding the petition filed by Uttarakhand Power Corporation Limited (UPCL) seeking approval for an additional surcharge. This surcharge is proposed for the period from April 2025 to September 2025, in line with provisions under the Electricity Act, 2003, and UERC regulations. UPCL argued that it incurs fixed costs due to power purchase agreements that remain unutilized when consumers opt for open access, sourcing electricity from providers other than the designated distribution licensee. This results in stranded costs that the utility seeks to recover through the additional surcharge.
UPCL provided data for the period April to September 2024, showing a total of 71 million units of stranded energy due to open access. It submitted details from six power plants – Jhajjar, Dadri Gas, FG Unchahar-3 and 4, Anta, and Auriya – indicating the energy received, surrendered, and total fixed costs incurred. The average fixed cost at the consumer end was calculated to be Rs. 1.14 per unit. Based on this, UPCL proposed the same rate as the additional surcharge for the upcoming period.
The petition invited public comments, and four stakeholders from the industrial sector responded with objections. They raised issues about the delayed posting of the petition, the legality and methodology used, and the lack of transparency. They also argued that the surcharge violated certain rules, particularly claiming there was no actual stranded power and that open access should not be penalized when consumers maintain their contract demand. UPCL, in its reply, clarified that it followed all legal and regulatory procedures and emphasized that the additional surcharge is separate from the cross-subsidy surcharge, which remains below the 20% cap of the average cost of supply.
The Commission reviewed the submissions, data, and methodology, including block-wise calculation of surrendered and stranded energy. It validated the fixed cost data from actual bills of the six generating stations and considered approved transmission and distribution losses. The Commission agreed with UPCL’s approach and concluded that the stranded cost due to open access amounted to ₹6.97 crore. Spread across the open access energy at the consumer end, this translated to an additional surcharge of ₹1.14 per unit.
The Commission thus approved the proposed additional surcharge of ₹1.14 per unit, effective from April 1, 2025, to September 30, 2025. This amount will be charged to open-access consumers on the actual energy drawn each month. The order reaffirms the requirement for periodic assessment and recovery of stranded fixed costs from consumers who opt for alternate electricity supply routes while maintaining UPCL’s supply obligations.
Discover more from SolarQuarter
Subscribe to get the latest posts sent to your email.
