The Telangana Electricity Regulatory Commission (TERC) has clarified the method for calculating Grid Support Charges (GSC) applicable to co-located Captive Power Plants (CPPs), ruling that the charges must be based on electrical capacity rather than the total energy consumed. The Commission issued the order on October 14, 2026, in response to an interlocutory application filed by Northern Power Distribution Company of Telangana Limited (TGNPDCL).
The application sought clarification on the interpretation of a provision in the Retail Supply Tariff Order (RSTO) issued on October 28, 2024. The provision stated that Grid Support Charges should be limited to the power consumed by the co-located load. Differences arose over whether the charge should be calculated using actual electricity consumption or the operational capacity of the captive power plant.
After examining the submissions, the Commission clarified that GSC is a charge associated with electrical capacity and not the total volume of energy consumed. The underlying cost rate is determined by dividing grid maintenance expenses by the total connected capacity. Accordingly, the Commission held that the charge must be applied on a capacity basis.
The Commission directed that the chargeable capacity should be calculated by deducting the capacity supplied to third parties through Open Access arrangements and the capacity committed under Power Purchase Agreements (PPAs) with distribution licensees from the total installed capacity of the co-located captive power plant.
However, the Commission clarified that deductions for third-party Open Access supply would not apply to electricity imported by the plant owner solely for personal consumption. This distinction establishes how capacity must be assessed when determining the applicable charges for captive power facilities.
The order also specified that Grid Support Charges would apply only during periods when the captive power plant remains interconnected with the electricity grid. Plants that are completely shut down and isolated from the grid would be exempt from the charges during those periods.
The Commission also rejected objections raised by industrial respondents concerning the doctrine of functus officio and limitations on reviewing regulatory orders. It concluded that TGNPDCL had sought clarification of the existing tariff provisions rather than a substantive review of the earlier order. Therefore, the request was not subject to the strict time limits applicable to review petitions.
The clarification will apply to both TGNPDCL and Southern Power Distribution Company of Telangana Limited (TGSPDCL), as both utilities operate under the common tariff order.
The Commission further specified that the clarification would cover the billing period from November 1, 2024, to March 31, 2026. Any resulting billing adjustments must be implemented without interest or penalties and distributed across upcoming billing cycles to ease the financial impact on affected consumers.
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