UERC Finalizes Second Amendment On Intra-State Open Access Regulations 2018 With Key Changes To Cross Subsidy Surcharge In Uttarakhand

The Uttarakhand Electricity Regulatory Commission has issued the second amendment to the Terms and Conditions of Intra-State Open Access Regulations, 2018, after receiving and reviewing feedback from stakeholders. The original regulations were framed in 2015, with a first amendment in 2016, and the draft of this second amendment was released on April 17, 2018. The last date for submission of objections and suggestions was May 11, 2018, and a public hearing was conducted on May 29, 2018. The commission analyzed the comments and held discussions before finalizing the amendment.

One of the main areas of change relates to Regulation 22 on Cross-Subsidy Surcharge. The draft amendment proposed that any consumer availing open access would need to pay a cross-subsidy surcharge, in addition to transmission and wheeling charges, on a per-unit basis depending on actual energy drawn. This surcharge would be paid to the distribution licensee of the area. It was also clarified that consumers using dedicated lines or interstate transmission systems for open access would still be liable to pay the surcharge. However, no surcharge would apply during power cuts imposed by the distribution licensee or for electricity carried from captive generation plants for own use. The amendment also included a formula to calculate the surcharge as the difference between the retail tariff and the average cost of supply of the distribution licensee.

The Uttarakhand Power Corporation Limited raised objections to some provisions, such as the review of cross-subsidy surcharge when power supply or load conditions changed, and also argued against the exemption for long-term and medium-term open access consumers. They contended that all subsidizing consumers should pay the surcharge irrespective of the state’s power position, citing earlier judicial pronouncements. On the other hand, the Open Access User Association argued that surplus or deficit power availability had no role in the levy of the surcharge and sought clarity on its calculation methodology.

The commission, while considering these objections, noted that its intent was always to promote open access, and that retrospective imposition of surcharge on long-term and medium-term consumers would be unfair as they had already worked out costs without factoring in such charges. It held that judicial pronouncements mandated payment of a cross-subsidy surcharge by every subsidizing consumer who chose not to take supply from the area distribution licensee. However, it reaffirmed that exemptions already provided would continue as per the earlier regulations, and the methodology for calculation would remain unchanged.

The final amendment, therefore, balanced the need to protect distribution licensees’ interests while also encouraging open access for consumers. The order, signed by Secretary Neeraj Sati, concluded the amendment process after detailed engagement with stakeholders, including Uttarakhand Power Corporation Limited and the Open Access User Association. This regulatory change is expected to shape open access in the state by ensuring clarity on surcharge applicability while upholding consumer rights and the state’s regulatory framework.