TNERC asks industrial units to pay additional surcharge of 75 paise per unit

Citing losses, Tangedco has sought additional surcharge from Open Access consumers who are not availing power supply from the utility directly leading to several power plants remaining idle and in some cases being shut down resulting in losses. 

The order is bound to add to the burden of the industrial consumers using the OA system. Tangedco had claimed an additional surcharge of Rs 1.23 per unit from OA consumers as it had ended up paying total fixed (capacity) charges to the tune of Rs 8,521.41 crore for the period October 2019 to March 2020 consequent to contractual obligations. Tangedco has to pay fixed charges to generators as per the power purchase agreement irrespective of the utilisation of generation. During the period, Tangedco, in its petition, stated that it has the stranded capacity of 1961.63 MW for which it paid fixed charges to the generators. 

Several industrial bodies which opposed the Tangedco seeking additional surcharge alleged that the utility had tied up for the generation which is more than the required capacity leading to the stranding of generating units. Dismissing such arguments, TNERC accepted TANGEDCO’s statement that the distribution company (discom) is obligated to maintain readiness of supply to consumers under various conditions, including outages of generating units, transmission constraints, seasonal load variations and increase in demand due to the addition of new consumers. “Moreover, it cannot be denied by the OA consumers that has chosen a person other than the discom of its area to supply the power to him, well knowing the availability of power in the discom’s grid which makes the petitioner’s capacity stranded, ” it said. 

As against Tangedco’s demand of Rs 1.23 per unit as an additional surcharge, TNERC determined the surcharge at Rs 0.85 per unit but decided to levy only 80% of the additional surcharge which is Rs 0.70 per unit recoverable from OA consumers. The commission directed Tangedco to file the petition to determine the surcharge on a six-monthly basis even as it strives to maintain optimum availability of power to avoid the payment of fixed charges on the stranded generation capacity.