Chandigarh, June 11: The Punjab State Electricity Regulatory Commission (PSERC) has determined the Additional Surcharge payable by open access consumers for the period from 1 April 2026 to 30 September 2026, holding that Punjab State Power Corporation Limited (PSPCL) continues to bear stranded fixed costs arising from its power purchase commitments.
The Commission passed the order in Petition No. 27 of 2026, filed by PSPCL under Section 42(4) of the Electricity Act, 2003 seeking determination of Additional Surcharge applicable to consumers procuring power from sources other than PSPCL through open access.
PSPCL Claimed Stranded Capacity Due To Open Access Migration
PSPCL contended that it had contracted adequate generation capacity to meet consumer demand and that increasing migration of commercial and industrial consumers to open access and captive renewable energy projects was resulting in stranded generation capacity and unrecovered fixed costs. The utility submitted that failure to recover such costs would adversely affect its financial position and ultimately impact consumers continuing to procure electricity from PSPCL.
The utility also highlighted the rapid growth of Green Energy Open Access (GEOA) projects in Punjab and stated that a significant number of industrial consumers had already obtained approvals for captive solar projects, with additional capacity expected to be commissioned in the near future.
Commission Finds Fixed Cost Liability Continues To Exist
After examining the data placed on record, the Commission concluded that PSPCL had demonstrated the existence of unavoidable fixed cost obligations arising from long-term power purchase arrangements and that a portion of such contracted capacity continued to remain stranded on account of open access transactions.
The Commission observed that Section 42(4) of the Electricity Act and Regulation 27 of the PSERC Open Access Regulations permit levy of Additional Surcharge where the distribution licensee is able to establish that its power purchase commitments remain stranded or that it continues to incur unavoidable fixed costs despite consumers sourcing power from alternative suppliers.
Relief Sought Against GEOA Exemptions Rejected
A significant aspect of the case concerned PSPCL's submissions regarding Green Energy Open Access consumers. PSPCL argued that statutory exemptions available to such consumers were leading to unrecovered network and fixed costs and sought consideration of this impact while determining the surcharge.
The Commission, however, declined to accept the contention. It observed that the exemptions available to Green Energy Open Access consumers flow directly from the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 and therefore cannot be treated as regulatory gaps. The Commission further noted that consumers availing such exemptions continue to pay fixed charges to PSPCL for their sanctioned demand and that the Additional Surcharge mechanism cannot be used to recover revenue variations arising from statutory policy decisions promoting renewable energy.
At the same time, the Commission granted liberty to PSPCL to approach it separately with a comprehensive proposal if it seeks amendments to the existing regulatory framework in light of evolving open access trends.
PSERC Rejects PSPCL's Demand For Additional 10% Mark-Up
The Commission also rejected PSPCL's request seeking an additional 10% increase over and above the calculated Additional Surcharge.
According to the Commission, neither the Electricity Act nor the PSERC Open Access Regulations contain any enabling provision permitting such an additional mark-up. The order states that Additional Surcharge is intended only as a compensatory mechanism for recovery of verified stranded costs and cannot be converted into an independent source of revenue generation. The Commission held that allowing a flat premium would effectively transform a cost-reflective charge into an unauthorized penalty on open access consumers.
Additional Surcharge Determined
After revising certain components of PSPCL's calculations, including disallowance of fixed charges claimed in respect of generating stations whose PPAs had already been terminated, the Commission determined the applicable Additional Surcharge as follows:
- ₹1.13/kWh for full open access consumers and for partial open access consumers (including Green Energy Open Access consumers) availing open access beyond their contract demand with PSPCL.
- ₹0.78/kWh for partial open access consumers availing open access up to their contract demand maintained with PSPCL.
Impact Of The Order
The order reaffirms that Additional Surcharge remains a compensatory charge linked to demonstrable stranded power purchase obligations rather than a revenue-enhancement mechanism. While recognising PSPCL's continuing fixed cost burden arising from open access migration, the Commission declined to expand the surcharge framework beyond the limits prescribed under existing law and regulations. The ruling is likely to be closely watched by open access consumers, renewable energy developers and distribution utilities across the region as Green Energy Open Access transactions continue to grow.