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KERC Revises Additional Surcharge in Open-Access Power Transactions

Acknowledging the growing integration of renewable energy sources, the Commission granted a 50 percent concession in ASC for open-access consumers procuring power from renewables.

December 01, 2023. By Abha Rustagi

In response to legal challenges and public hearings, the Karnataka Electricity Regulatory Commission (KERC) has revisited its decision on the Additional Surcharge (ASC) imposed on open-access transactions in the state.

Initially, the KERC set an ASC of INR 1.48 per unit through its May 2023 Tariff Orders. Legal challenges ensued, leading to the High Court of Karnataka setting aside the order, triggering a cascade effect of legal scrutiny.

To address these challenges, the KERC scheduled a hearing on August 18, 2023, issuing public notices and individually notifying stakeholders.

Stakeholders emphasized alignment with the Electricity Act of 2003 and the Tariff Policy of 2016, arguing that the ASC should mirror fixed charges determined in the retail supply tariff. They also referenced the Central Government Rules of 2022, suggesting the surcharge need not be collected from green energy open-access consumers paying fixed charges.

The Commission, grappling with the absence of 15-minute blockwise data for all open-access transactions, opted for a method considering the entire fixed cost embedded in energy charges. This resulted in an ASC of INR 1.40 per unit for FY24.

However, acknowledging the growing integration of renewable energy sources, the Commission granted a 50 percent concession in ASC for open-access consumers procuring power from renewables, settling at 70 paise per unit for this category. The ASC will not apply to captive consumption, with adjustments for amounts already paid.

The decision aims to balance recovering fixed costs and adapting to the evolving renewable energy landscape. The KERC recognizes the complexities and emphasizes a phased approach in line with national and state regulatory frameworks.

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Karnataka Electricity Regulatory Commission