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Uttarakhand Lowers Open Access Additional Surcharge to Rs1.09/kWh for October 2025–March 2026

The Uttarakhand Electricity Regulatory Commission (UERC) has announced a revised additional surcharge of Rs1.09 (~$0.0123) per kWh for open access consumers, applicable from October 1, 2025, to March 31, 2026.

The new rate reflects a reduction of Rs0.03 (~$0.00033)/kWh compared to the Rs1.12 (~$0.013)/kWh applicable between October 2024 and March 2025, and is slightly lower than the Rs1.14 (~$0.013)/kWh surcharge levied during April–September 2025.

The decision follows a petition filed by Uttarakhand Power Corporation Limited (UPCL), seeking approval to recover stranded fixed costs from its long-term power purchase commitments that became underutilized due to open access consumption.

Background

UPCL filed its petition on June 28, 2025, to recover fixed costs stranded as a result of consumers opting for open access power purchases instead of drawing electricity through the utility’s distribution system.

The utility emphasized that while it maintains long-term power purchase agreements (PPAs) to ensure reliable supply for all consumers, some high-consumption users procured electricity directly from the market, leading to unused contracted capacity.

An analysis of data from October 2024 to March 2025 revealed 125.99 million units (MU) of stranded energy, matching the open access energy recorded during that period. For its calculations, UPCL considered six interstate generating stations—Jhajjar Aravali, Dadri Gas, FG Unchahar-3, FG Unchahar-4, Anta, and Auriya—with a total fixed cost of Rs667.8 million (~$7.53 million).

After accounting for 1.4% transmission and 13% distribution losses, the average fixed cost was estimated at Rs1.06 (~$0.012)/kWh at the state periphery and Rs1.24 (~$0.014)/kWh at the consumer end.

Some industrial stakeholders, including Kashi Vishwanath Textile Mill, Kumaon Garhwal Chamber of Commerce & Industry, and Galwalia Ispat Udyog, challenged the levy on consumers connected at 132 kV and above, questioning whether the stranded capacity could truly be attributed to open access usage.

UPCL defended its position, citing Section 42(4) of the Electricity Act and Regulation 23 of the UERC Open Access Regulations, maintaining that all open access consumers, regardless of voltage level, are liable to pay the surcharge.

Commission’s Findings

After reviewing submissions and objections, the UERC concluded that most issues had already been settled in earlier rulings. The Commission independently examined slot-wise data from October 2024 to March 2025, comparing open access drawal with power surrendered from the six generating stations.

Applying the “lower-of” methodology, the Commission determined 129.80 MU of stranded energy at the state level and 111.68 MU at the consumer end. With total fixed costs of Rs667.8 million, and after factoring 1.10% transmission and 13% distribution losses, the Commission derived a weighted average fixed cost of Rs1.09/kWh, equivalent to Rs121.5 million (~$1.37 million) in stranded costs.

Dividing this by the total open access energy of 112 MU, the Commission finalized the additional surcharge at Rs1.09 (~$0.0123)/kWh, applicable to all open access consumers for the six-month period.

The order confirms that the levy aligns with the Electricity Act, Tariff Policy, and UERC Open Access Regulations, and will apply uniformly across consumer categories and voltage levels.

In a related development earlier this year, UERC dismissed review petitions filed by 12 solar developers contesting the cancellation of Letters of Award (LoAs) issued under the state’s 200 MW Solar Program.