Telangana Approves INR 0.82/kWh Additional Surcharge On Open Access Consumers For November 2026–March 2027

The Telangana Electricity Regulatory Commission (TGERC) has approved an additional surcharge of ₹0.82 per kWh on open access consumers for the second half of the financial year 2026–27. The surcharge will apply from November 1, 2026, to March 31, 2027, to help recover the fixed costs incurred by distribution companies for power purchase commitments that have become stranded due to consumers shifting to open access.

The common order was issued following petitions filed by the Southern Power Distribution Company of Telangana Limited (TSSPDCL) and the Northern Power Distribution Company of Telangana Limited (TSNPDCL). Both distribution companies sought approval to levy an additional surcharge to recover fixed costs associated with long-term power purchase agreements. These commitments have continued to create financial obligations for the utilities despite some consumers procuring electricity through open access from alternative suppliers.

As part of the regulatory proceedings, the commission published public notices in newspapers and invited suggestions and objections from stakeholders. Five major stakeholder organisations and industry associations submitted their views on the proposed surcharge. A public hearing was subsequently conducted at the commission’s court hall in Hyderabad, where representatives of the distribution companies and objecting stakeholders presented their arguments.

During the proceedings, stakeholders raised concerns about a significant increase in the additional surcharge. They argued that open access enables industries to procure electricity at competitive prices, supporting industrial growth and improving business competitiveness. They also maintained that the surcharge should gradually decline and eventually be eliminated. Some stakeholders further questioned the attribution of surplus power capacity entirely to open access migration, highlighting that renewable energy intermittency and power procurement planning decisions can also contribute to surplus capacity.

The commission examined the submissions in accordance with the Electricity Act, 2003, the National Tariff Policy and its approved regulatory methodology. It assessed the utilities’ claims regarding stranded capacity across 17,472 fifteen-minute time blocks during the reference period. Following scrutiny of the relevant data and audited annual accounts, the commission determined the total available long-term power purchase capacity at 11,431.77 MW. Of this, 282.56 MW was identified as stranded capacity attributable to open access consumers.

The commission considered approved fixed power purchase charges amounting to ₹8,489.63 crore. It also evaluated transmission and distribution costs at ₹0.48 per kWh and ₹0.1266 per kWh, respectively, as part of its assessment.

After accounting for demand charges already recovered from open access consumers, the net stranded fixed charges eligible for recovery were calculated at ₹77.07 crore. The chargeable open access electricity sales during the relevant period were estimated at 936.26 million units. Based on these calculations, the commission determined the additional surcharge at ₹0.82 per kWh.

However, the commission also considered the delay by the distribution companies in filing their petitions. Consequently, it did not permit recovery of the surcharge for October 2026. The approved rate can only be levied and collected during the five-month period from November 1, 2026, to March 31, 2027.

The order establishes the additional surcharge applicable to Telangana’s open access consumers for the remaining period of FY 2026–27.