HERC approves INR 1.21/ kWh Additional Surcharge on Haryana Open Access Consumers

The Haryana Electricity Regulatory Commission (HERC) has given the green light to an additional surcharge of INR 1.21 per unit for electricity consumers using open access to buy power outside the state’s DISCOMs.

This move impacts consumers under Uttar Haryana Bijli Vitran Nigam Limited (UHBVNL) and Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL), effective immediately from the date of the order.

The surcharge stems from petitions filed by both DISCOMs for the first half of FY 2025-26, aimed at recovering 'stranded power costs.' These costs arise because open access consumers reduce the volume of power purchased through long-term agreements, leaving DISCOMs stuck with fixed charges on underutilised power that still must be paid.

Based on consumption data from April to September 2024, the DISCOMs identified 86 million units (MUs) of stranded power attributable to open access users. With an average fixed cost of INR 1.44 per unit approved by HERC earlier this year, the total stranded cost hit INR 12.36 crore. Dividing this by the estimated open access consumption for the same period (101.73 MUs), HERC arrived at the INR 1.21 per unit surcharge.

The Indian Energy Exchange (IEX) objected to the surcharge, citing the Ministry of Power’s Electricity (Amendment) Rules, 2024, which state that additional surcharge should not apply to the extent of contract demand maintained with distribution licensees. However, the DISCOMs pushed back, stressing their legal duty under the Electricity Act, 2003, to provide uninterrupted 24x7 power supply, which requires long-term power purchase agreements. They argued that exempting open access consumers would unfairly shift these fixed costs onto other consumers.

HERC sided with the DISCOMs, referencing both the Electricity Act and its own Open Access Regulations, 2012, which empower the Commission to levy such surcharges to recover fixed costs. It also cited Supreme Court and Karnataka High Court rulings that uphold the compensatory nature of these charges and the regulatory authority over open access. The INR 1.21 per unit surcharge will remain effective until further revision by the Commission.