The Tamil Nadu Electricity Regulatory Commission (TNERC) has approved an additional surcharge of ₹0.54 per unit for Open Access (OA) consumers who procure electricity through third-party sales or power exchanges. This surcharge will take effect from December 12, 2024, and remain in place until March 31, 2025.

The move follows a petition filed by the Tamil Nadu Power Distribution Corporation Ltd (TNPDCL), which had requested approval for a higher surcharge of ₹1.06 per unit. TNPDCL argued that the shift of certain consumers to Open Access systems had resulted in stranded power purchase obligations, creating unavoidable fixed costs. The surcharge is aimed at recovering these costs.

TNPDCL’s petition was based on provisions outlined in Section 42(4) of the Electricity Act, 2003, which mandates that Open Access consumers pay an additional surcharge to offset the fixed costs incurred by the distribution licensee. Further support for the surcharge came from TNERC’s Grid Connectivity and Intra-State Open Access Regulations, 2014, which allow the levy of an additional surcharge if the licensee’s power purchase commitments are stranded or if there are unavoidable fixed costs associated with such power procurements.

After reviewing the data submitted by TNPDCL, the Commission passed an order for a levy of ₹0.54 per unit surcharge on power drawn by Open Access consumers from third-party sales and power exchanges during the period from December 12, 2024, to March 31, 2025.

In addition, TNERC instructed TNPDCL to file petitions for the determination of the surcharge every six months, in line with Regulation 24(3) of the TNERC Grid Connectivity and Intra-State Open Access Regulations. This filing requirement will apply even if no stranded capacity is identified in a given period.

This new surcharge is in addition to the existing cross-subsidy surcharge of approximately ₹1.92 per unit, which is already levied on Open Access consumers.

TNERC’s decision has drawn criticism from industry stakeholders, particularly over its impact on consumers using green energy.

“We have consistently highlighted that stranded capacity is not caused by Open Access consumers, but our concerns have been overlooked, said K Venkatachalam, Advisor to the Tamil Nadu Spinning Mills Association. He added: “Despite a notification from the Ministry of Power exempting green power from such levies, this order imposes the surcharge on green energy, undermining efforts to promote renewable energy.