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The regulatory commission in Uttarakhand has issued an order regarding a petition submitted by the state’s power corporation. The purpose of this petition is to determine an additional surcharge for electricity consumers who use open access. Open access allows consumers to purchase electricity from sources other than their local utility, which in this case is the Uttarakhand Power Corporation Limited (UPCL). The additional surcharge is meant to cover the fixed costs incurred by UPCL due to its obligation to supply power to these consumers, even when they choose other suppliers.
The power corporation argues that even when open-access consumers source electricity from other suppliers, UPCL still has to maintain infrastructure and agreements to ensure a steady power supply, resulting in stranded costs. These costs arise from the agreements UPCL holds with power generation plants, where it must pay a fixed cost regardless of whether the power is fully utilized. As a result, the corporation seeks to recover these stranded costs by charging an additional surcharge to open-access consumers.
From October 2024 to March 2025, UPCL calculated the surcharge based on the energy consumption and the fixed costs incurred in the previous corresponding period (October 2023 to March 2024). The data shows how much energy was drawn from open access and the stranded energy due to open access usage. For example, during this period, open-access consumers used 21.95 million units of electricity, causing an equivalent amount of energy to remain stranded. UPCL has also listed the costs associated with specific power plants that were not fully utilized due to open access. These include plants like Jhajjar Aravali, Dadri Gas, and others, which incurred significant fixed costs even though the power they generated wasn’t fully needed.
The commission opened the petition to public comments, receiving input from stakeholders in the industry. The stakeholders raised several concerns, primarily questioning the accuracy of the data used in the surcharge calculations. They asked why provisional estimates were being used instead of audited data, questioned whether all stranded power could be attributed to open-access consumers, and raised concerns about the distribution losses factored into the calculations. There were also concerns about the power corporation’s purchasing practices, with some stakeholders pointing out that UPCL continued to buy power from exchanges even when it claimed to have surplus or stranded power.
UPCL responded to these objections, stating that no provisional figures were used and that the methodology for calculating the surcharge is consistent with the guidelines. They explained that the stranded power attributed to open-access consumers is only a small portion of the total stranded energy, and they justified their continued purchases from power exchanges by citing cost-saving measures. They argued that buying power from exchanges at lower rates allows them to avoid using more expensive power from long-term contracts, ultimately benefiting consumers.
After reviewing the petition, stakeholder comments, and UPCL’s responses, the regulatory commission concluded that the additional surcharge was justified. The commission followed its established methodology to calculate the surcharge, taking into account the stranded power due to open access and the fixed costs from the relevant power plants. The surcharge for open-access consumers will be ?1.12 per unit of electricity for the period from October 2024 to March 2025. This surcharge aims to ensure that the power corporation can recover its fixed costs while continuing to provide reliable electricity service, even as some consumers choose to source their power from other suppliers. |
