TAMIL NADU ELECTRICITY REGULATORY COMMISSION

Order of the Commission dated this the 24th day of February 2023

PRESENT:-

Thiru M.Chandrasekar .... Chairman

Thiru K.Venkatesan .... Member

and
Thiru B.Mohan .... Member (Legal)

M.P.No. 41 of 2022

Tamil Nadu Generation and Distribution Corporation Ltd.

(TANGEDCO)
NPKRR Maaligai
144, Anna Salai,
Chennai – 600 002 .... Petitioner

This Miscellaneous Petition has been preferred by the Petitioner seeking,

inter alia directions to hold that the obligation of the State Distribution Licensee in

terms of power purchase agreements has been and continues to be stranded and

there is an unavoidable obligation and incidence to bear fixed costs consequent to

such agreements and to determine the additional surcharge of Rs.0.88 per unit

payable by open access consumers on adjusted quantum of power purchase

through open access, and to consider the information submitted by TANGEDCO for

determining the said surcharge and to pass any other orders as the Commission

deems just and proper.

This petition having come up for hearing on 16-02-2023 in the presence of

Tvl. N.Kumanan and A.P. Venkatachalapathy, Standing Counsel for the Petitioner

TANGEDCO and on consideration of the representation made by the Standing

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Counsel for the Petitioner and on perusal of the material records, this Commission

passes the following

ORDER

1. Facts of the Case:-

1.1. The Tamil Nadu Generation and Distribution Corporation Limited has filed this

petition for determination of the Additional Surcharge under the provisions of Section

42(4) of the Electricity Act 2003 and Regulation 24 of the TNERC (Grid connectivity

and Intra-State Open Access) Regulations 2014 chargeable on Open Access

customer.

1.2. In this petition, TANGEDCO has prayed to determine the rate of Additional

surcharge payable by the consumers for the quantum of power purchased through

Open Access during the period from 01.10.2022 to 31.03.2023 based on the data

relating to the period from October 2021 to March 2022.

1.3. The Additional surcharge for the period from 16.04.2021 to 30.09.2021 and

01.10.2021 to 31.03.2022 were determined by the Commission in M.P.18 of 2020

and M.P.30 of 2021 based on the six months data and the Distribution Licensee

(TANGEDCO) was directed to file the future petitions for determination of Additional

surcharge in the similar manner. After approval of Addl. surcharge for the period upto

31.03.2022, the subsequent petition for the period from 01.04.2022 to 30.09.2022

was filed by the TANGEDCO because of the direction of Hon‟ble APTEL in A.No.177

of 2021 with regard Retail Tariff petition process and became infructuous.

1.4. In this petition, TANGEDCO sought to determine the Additional surcharge at

Rs.0.88 / unit for the period from 01.10.2022 to 31.03.2023 based on the details of

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Capacity available, Capacity not availed, Scheduled power, Open Access quantum

and Fixed cost incurred during October 2021 to March 2022.

1.5. Commission admitted this Miscellaneous petition No.41 of 2022 on

23.01.2023 and directed to webhost the petition in the websites of TANGEDCO &

TNERC for 15 days seeking comments of the stakeholders. The petitioner filed the

comments/objections received from the Stakeholders and the reply given to them on

16.02.2023 accordingly.

2. Contentions of the Petitioner:-

2.1. The petitioner TANGEDCO has stated that its Contracted capacity as on

31.03.2022 is as below:-

Sl. No. Generation Category Installed capacity

(in MW)
1 Thermal 4320.00
2 Gas 516.08
3 Central Generating Stations - Share 6972.00
4 Independent Power Project 1105.50
5 Long Term Open Access 2830.00
6 Medium Term Open Access 400.00
7 Captive Power Projects 0.00
Total 16143.58

8 Non Conventional Energy

I Hydro 2321.90
II Wind 1978.01
III Solar 3482.34
IV Co-Generation 181.30
V Bio mass 2.40
Total 7965.95
Grand Total 24109.53

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2.2. With regard to demand and supply position, the maximum power demand of

the State was 17,196 MW and average daily consumption of the State was 375.70

MU during the FY 2021-22. Maximum demand met was 17,563 MW (29-04-2022)

and maximum consumption per day was 388.078 MU (29-04-2022) so far in FY

2022-23.

2.3. The petitioner has stated that the petition has been filed with the following

legal frameworks -

(i) The relevant Provisions of Electricity Act 2003, Policies of Government of India
and Regulations on Open Access Notified by Hon‟ble TNERC are detailed
below.
(ii) The section 40 of Electricity Act describes the duties of Transmission Licensee
related to open access
“to provide non-discriminatory open access to its transmission system for use
by-
(i) any licensee or generating company on payment of the transmission
charges ; or
(ii) any consumer as and when such open access is provided by the State
Commission under sub-section (2) of section 42, on payment of the
transmission charges and a surcharge thereon, as may be specified by the
State Commission:
Provided that such surcharge shall be utilised for the purpose of meeting the
requirement of current level cross-subsidy:
Provided further that such surcharge and cross subsidies shall be
progressively reduced in the manner as may be specified by the State
Commission:
Provided also that the manner of payment and utilisation of the surcharge
shall be specified by the State Commission.

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(iii) Section 42 (2) of the Electricity Act 2003 provides following provisions
wherein the powers have been given to State Commissions for specifying
cross subsidy and surcharge.
“The State Commission shall introduce open access in such phases and
subject to such conditions, (including the cross subsidies, and other
operational constraints) as may be specified within one year of the appointed
date by it and in specifying the extent of open access in successive phases
and in determining the charges for wheeling, it shall have due regard to all
relevant factors including such cross subsidies, and other operational
constraints:
Provided that such open access shall be allowed on payment of a surcharge in
addition to the charges for wheeling as may be determined by the State
Commission:
Provided further that such surcharge shall be utilised to meet the
requirements of current level of cross subsidy within the area of supply of the
distribution licensee:
Provided also that such surcharge and cross subsidies shall be progressively
reduced in the manner as may be specified by the State Commission:
Provided also that such surcharge shall not be leviable in case open access is
provided to a person who has established a captive generating plant for
carrying the electricity to the destination of his own use:”

(iv) Further, Section 42 (4) of the Act provides following provisions related to
„Additional Surcharge‟.
“Where the State Commission permits a consumer or class of consumers to
receive supply of electricity from a person other than the distribution licensee
of his area of supply, such consumer shall be liable to pay an additional
surcharge on the charges of wheeling, as may be specified by the State
Commission, to meet the fixed cost of such distribution licensee arising out of
his obligation to supply.”

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(v) Section 8.5 of the National Tariff Policy provides following provisions that deal
with calculation of cross subsidy surcharge and applicability of additional
surcharge to be paid by open access consumers.
“National Electricity Policy lays down that the amount of cross-subsidy
surcharge and the additional surcharge to be levied from consumers who are
permitted open access should not be so onerous that it eliminates
competition which is intended to be fostered in generation and supply of
power directly to the consumers through open access.”
“8.5.4The additional surcharge for obligation to supply as per section 42(4)
of the Act should become applicable only if it is conclusively demonstrated
that the obligation of a licensee, in terms of existing power purchase
commitments, has been and continues to be stranded, or there is an
unavoidable obligation and incidence to bear fixed costs consequent to such
a contract. The fixed costs related to network assets would be recovered
through wheeling charges.”
(vi) The clause 8.5.6 also stipulates that in case of outages of generator supplying
to a consumer on open access, standby arrangements should be provided by
the licensee on the payment of tariff for temporary connection to that
consumer category as specified by the Appropriate Commission. Provided that
such charges shall not be more than 125 percent of the normal tariff of that
category.
(vii) The Regulation 24 of TNERC (Grid connectivity and Intra-State Open Access)
Regulations, 2014, provides following provisions, which deal with „Additional
Surcharge‟
“24. Additional Surcharge. –
(1) An open access customer, receiving supply of electricity from a person
other than the distribution licensee of his area of supply, shall pay to the
distribution licensee an additional surcharge on the charges of wheeling, in
addition to wheeling charges and cross-subsidy surcharge, to meet out the
fixed cost of such distribution licensee arising out of his obligation to supply
as provided under subsection (4) of section 42 of the Act.

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 (2) This additional surcharge shall become applicable only if the obligation of
the licensee in terms of power purchase commitments has been and
continues to be stranded or there is an unavoidable obligation and incidence
to bear fixed costs consequent to such a contract. However, the fixed costs
related to network assets would be recovered through wheeling charges.
(3) The distribution licensee shall submit to the Commission on six monthly
basis, a detailed calculation statement of fixed cost which the licensee is
incurring towards his obligation to supply. The Commission shall scrutinize the
statement of calculation of fixed cost submitted by the distribution licensee
and obtain objections, if any, and determine the amount of additional
surcharge:
Provided that any additional surcharge so determined by the Commission
shall be applicable only to the new open access customers.
(4) Additional surcharge determined on per unit basis shall be payable, on
monthly basis, by the open access customers based on the actual energy
drawn during the month through open access:
Provided that such additional surcharges shall not be levied in case
distribution access is provided to a person who has established a captive
generation plant for carrying the electricity from such plant to the destination
of his own use.

2.4. The petitioner has stated that the present petition is filed based on the

directions issued in the order of previous petition vide case M.P.No.30 of

2021, order dated 29.09.2021 in which the Commission has directed

TANEDCO as follows:

“7.2. Further, the Commission hereby directs the petitioner to file the petition
for determination of the Additional Surcharge on six monthly basis in future
under 24(3) of the TNERC Grid Connectivity and Intra State Open Access
Regulations, well in advance, even though no stranded capacity was identified
during a set of six months period. 15 minutes Block wise data in respect of
the power scheduled by Open access consumers shall be filed by the
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 petitioner in respect of both Renewable & Non-Renewable energy along with
the petition.”

2.5 TANGEDCO filed a petition to determine additional surcharge of Rs.0.66 per

unit payable by the OA consumers before the Commission in M.P.No.5 of

2022 for the period from April 2022 to October 2022 and order was reserved

on 29.03.2022.

2.6 The additional surcharge for the period from 01.10.2022 to 31.03.2023 based

on data for the period from 01.10.2021 to 31.03.2022 is now filed before the

Commission for determination of Additional Surcharge payable by the open

access consumers.

2.7. Additional Surcharge levied details from October 2021 to March 2022
The details of Additional surcharge demand raised during the period from

01.10.21 to 31.03.22 are as follows:

No. of ASC. Demand

S.No. Period
Service (Rs in Cr.)
1 Oct-21 717 15.95
2 Nov-21 757 26.57
3 Dec-21 834 27.45
4 Jan-22 871 29.40
5 Feb-22 887 19.73
6 Mar-22 871 10.53
TOTAL 129.63

2.8. Additional Surcharge for the period from 01.10.2022-31.03.2023 :-

The Additional Surcharge for the period from October 2022 to March 2023 is to

be determined based on the data from October 2021 to March 2022. The

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 additional surcharge is worked out based on the calculations approved earlier

in M.P.No.30 of 2021 as follows:

Calculation of Additional Surcharge based on data for the period of

October 2021 to March 2022
S.No. Description Nomenclature Value Unit

1 Contracted Capacity A 24109.53 MW

2 Maximum Availability B 20360.74 MW

3 Minimum Availability C 9050.00 MW

4 Average Availability D 12600.57 MW

5 Maximum Scheduled E 19552.61 MW

6 Minimum Scheduled F 5694.99 MW

7 Average Scheduled G 11001.61 MW

8 Capacity not availed (Max) H 5374.74 MW

9 Capacity not availed (Min) I 0.00 MW

10 Capacity not availed (Avg.) J 1598.96 MW

11 OA Allowed (Max) K 3638.18 MW

12 OA Allowed (Min) L 0.00 MW

13 OA Allowed (Avg.) M 478.41 MW

14 Capacity stranded due to OA N 448.55 MW

15 Total Fixed Charge (PPA) O 7890.81 Rs in Crore

16 Fixed charges per MW available P=O/D 0.63 Rs in Crore

Fixed charges of stranded
17 Q=P*N 280.89 Rs in Crore
capacity
18 Transmission Charges paid R 2918.98 Rs in Crore

19 Energy Scheduled S 55540.08 MU

20 Transmission Charges per kWh T=R/S*10 0.53 Rs./kWh

Distribution Charges (As
21 U 0.21 Rs./kWh
approved in Tariff Order)
22 Total T & D Charges per kWh V=T+U 0.74 Rs./kWh
Energy Consumed by OA
23 W 4714.71 MU
Consumer from Discoms
T & D charges payable to
24 X= W*V/10 347.03 Rs in Crore
Discoms by OA consumers
Demand Charges Recovered by
25 Y 473.45 Rs in Crore
Discoms from OA
Demand Charges to be
26 Z=Y-X 126.42 Rs in Crore
adjusted
Net stranded charges
27 AA=Q-Z 154.48 Rs in Crore
recoverable

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 28 OA adjusted energy AB 1763.72 MU

29 Additional surcharge AC AC=AA/AB*10 0.88 Rs./kWh

3. Additional affidavit filed by the Petitioner:

3.1. The petitioner has stated that as directed by the Commission in the Daily Order

dated 23.01.2023 the petition was hosted in the TANGEDCO‟s official website

www.tangedco.gov.in on 23.01.2023 for obtaining comments / suggestions from the

stakeholders.

3.2. The suggestions/comments were received from 6 stakeholders. The reply for

the suggestions/comments given by the TANGEDCO to these stakeholders.

4. Stakeholders’ comments/objections on the petition and the petitioner’s

replies:

4.1. The petition was also made available for 15 days as directed by the

Commission in the Daily Order dated 23.01.2023. The petition was also posted in the

Commission‟s website for the period upto 07.02.2023. The suggestions / comments

were received from 6 stakeholders. The petitioner has stated that the replies were

sent directly to all the above 6 stakeholders as below.

4.2. The Suggestions / Comments have been received from the following

stakeholders –

1. Thiru.P.Selvaraj, Erode

2. Thiru.S.Neelakanda pillai, Chennai

3. M/s. Indian Energy Exchange Limited

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 4. Tamil Nadu Spinning Mills Association

5. The Southern India Mills‟ Association

6. M/s.India Tax payer Organisation

4.3. Thiru.P.Selvaraj, Erode:

4.3.1. Comments are detailed below -

(i) The block-wise data, as provided usually as per Annexure- 6, is not found

provided and made available in the TANGEDCO's Portal, which prevents us

from making a prudent check and analyzing the data completely and to

provide our comments on the same.

(ii) The TANGEDCO claims that it has stranded capacity, whereas in Column

No.9 of Annexure-I, it is seen that the capacity not availed minimum, is shown

as 0. That is to say, there was no stranded capacity. The Regulation however

says that the capacity must be continuously stranded, during the entire period

of 6 months of the reference period. However, not even a single minute, the

capacity is shown as continuously stranded.

(iii) As the TANGEDCO is following the GERC MODEL, we are reproducing below

the Extract from GERC Order in No. 1302 of 2013 on which much

dependence is taken.

a. "In order to derive the stranded capacity due to Open Access Consumers, the
Commission has considered the hourly data of surplus capacity (available
capacity-scheduled capacity) vis-a-vis scheduled capacity of OA consumers.
The lower of the surplus capacity as shown above and capacity scheduled by
OA consumers is considered as stranded capacity for the hour. The average
stranded capacity due to OA consumers for the six months period (April 2013
to September 2013) works out as 739 MW.

(Enclosed annexure of GERC for ready reference)"

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 In case of GERC, the lower of the Serial No.9 and 13 i.e. (891 and 739), it is

739 MW in the case of the GERC, and the same is taken as capacity stranded

due to OA in Sl.No.14

Whereas in case of the TANGEDCO, the Serial No.9 is 0 and Serial No.13 is

478.41, lower of 9 & 13 is "0". Accordingly, Serial No.14 in case of

TANGEDCO must be "0". However TANGEDCO has given Serial No.14 as

448.55 which is incorrect.

Accordingly all calculations from Serial no.15 to 29 are incorrect

(iv) The calculation of the quantum of Additional Surcharge required, must be

based on demonstrating the continuous stranded capacity and should be

shared and paid by the entire quantum of OA units consumed during the

reference period.

4.3.2. TANGEDCO‟s reply on the above comments:-

(i) This petition is filed for determination of Additional Surcharge based on the

data 01.10.2021 to 31.03.2022 for the period from 01.10.2022 to 31.03.2023

based on the procedure approved by the Commission. The 15 minutes

blockwise data (availability, scheduled and OA availed) are submitted to the

Commission in soft copy due to voluminous of data.

(ii) The procedure for arriving stranded capacity as clearly mentioned in Para

No.6.20 of M.P.No.30 of 2021 dt.28.09.2021.

6.20.1. The petitioner is obligated to demonstrate that its power purchase

commitments was continued to be stranded during the period under question
and the petitioner had unavoidable obligation (Two part tariff) to bear fixed
cost for such contracts as stipulated under Regulation 24(2) of the TNERC
(Grid Connectivity and Intra State Open Access) Regulations, 2014.

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 6.20.2. The petitioner has submitted the 15 minutes block-wise data obtained
from the State Load Despatch Centre in respect of the capacity available and
scheduled details of the Distribution licensee & Open Access Consumers.
6.20.3. The Commission has carefully gone through the details furnished by
the Petitioner. Whatever the block-wise quantum was scheduled by the SLDC,
it has been compared against the “available capacity” in the corresponding
block the unscheduled quantum under each block is considered as “Capacity
not availed” under respective block. The average unscheduled capacity
(stranded capacity) of the petitioner’s conventional plants is 2578.52 MW;
however, the stranded capacity due to such Open access purchase (viz., 3rd
party purchase, IEX, Power Exchange, etc.,) alone is to be quantified.
6.20.4. The petitioner has provided the quantum of power purchased by the
Open Access consumer in each 15 minutes block during the period from
October 2020 to March 2021. The petitioner / SLDC has provided such data.
The block wise stranded capacity i.e., “Capacity not availed” has been
compared with the energy scheduled by the Open Access consumers; the
comparison is made to justify that since the claim can be only with reference
to thirty party purchase, IEX, Power exchange etc., In every block, the least of
the “OA scheduled energy” or “Capacity not availed” is considered to arrive at
the “Average stranded capacity” for the entire period of six months i.e.,
October 2020 to March 2021. The data furnished in this petition is scrutinised
with reference to the petitioner / SLDC’s data and corrected wherever
required. From this comparison, we find that, there is an average stranded
capacity of 597.11 MW due to Open access consumers during the six months
period.
The column of 9 of the working sheet Min of capacity not allowed is related to

any one particular block of 180 days and 96 blocks. The column 10 Average

capacity not availed has to be compared with column 13 OA allowed average

and not to be compared with column 9.

(iii) In the Gujarat order it is clear that every hour comparison made for minimum

of capacity not availed or OA scheduled to arrive the stranded capacity for

that hour. The average of the stranded capacity only considered for arriving
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 stranded capacity charges. The order is not comparing with Minimum of

capacity not availed in column 9 and column 13. The order in Petition No.1302

of 2013 dt 12.03.2014 which is reproduced as follows.

“ (i) In order to derive the stranded capacity due to Open Access Consumers,
the Commission has considered the hourly data of surplus capacity
(available capacity – scheduled capacity) vis-à- 61 vis scheduled capacity of
OA consumers. The lower of the surplus capacity as shown above and
capacity scheduled by OA consumers is considered as stranded
capacity for the hour. The average stranded capacity due to OA
consumers for the six months period (April 2013 to September 2013)
works out as 739 MW”.
(iv) Para No. 8.10 of the Judgement of the Commission in MP No 32 of 2021

dated 08.02.2022 (M/s Birla Carbon India Pvt. Ltd Vs TANGEDCO and others

is reproduced as below.

“8.10. Taking into account of all the above circumstances and facts, we are of
the well considered view that the Additional surcharge shall be levied on the
quantum of OA `39 power actually drawn only as stipulated in Regulation
24(4) of the TNERC Intra-State Open Access Regulations 2014”

Based on the above the adjusted quantum (energy drawn), has been
considered for arriving additional surcharge is as per regulation in force.

4.4. Thiru.Neelakanda Pillai, Chennai:

4.4.1. Comments are detailed below -

(i) TNERC is the authority to deliver the products in general based on the view of

the petitioner / respondents / stakeholders. But not limited to all the three

above, TNERC is also having more accountable as per the Electricity Act, if

any one fails to respond properly with required data.

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(ii) In M.P.No.18 of 2020, only the OA consumers were given comments /

suggestions in majority, none of the consumer forums participated in that

case. This is total failure by the TNERC unless take initiative to participate

more and more consumers or their representative should participate.

(iii) TNERC‟s order, in M.P.No.18 of 2022, never discussed about the actual price

of the power including other charges.

(iv) Consumer forums were not encouraged by TNERC by giving proper training,

arranging discussions, clarity by disclosing all data to them

4.4.2. TANGEDCO‟s reply on the above comments:-

(i) In respect of MP No 18 of 2020 TASMA has filed Appeal before the Hon‟ble

APTEL for the order dated 15.04.2021 and the Hon‟ble APTEL has dismissed

the appeal on 15.11.2021.

(ii) In respect of energy schedule due to voluminous of the data details of schedule

energy has not been furnished at the time of filing. However the block wise 15

min data has been submitted in soft copy for verification of the data. The same

is reproduced as follows.

“8.21.5. Energy scheduled: The Scheduled energy furnished by the petitioner

is 48693 MU; but the petitioner has not furnished any break up for this
scheduled energy. Hence, we could not verify the correctness of the data
furnished. On verifying with the SLDC data, it is found that, during the
period from October 2019 to March 2020, TANGEDCO has scheduled the
energy for the quantum of 43159 MU only, therefore, it has been taken into
calculation of per unit.”

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 In view of the above, it is stated that TANGEDCO has filed the petition to

determine the additional surcharge payable by Open Access consumers before

the Commission as per the Regulations in force and the same is in order.

4.5. M/s.Indian Energy Exchange Limited, Uttar Pradesh:

4.5.1. Comments are detailed below -

(i) The petitioner should demonstrate that there is continuous stranded capacity

on account of Open access. Therefore, case for determination of Additional

surcharge may not arise.

(ii) The petitioner has not provided the requisite data to stakeholders. It is pertinent

to analyse the generation back-down data for each of the 15 min time block

period along with the reason of such back-down as the back down could be on

account of reasons other than Open Access to assess the case for Additional

Surcharge. Any unjustifiable imposition of Additional Surcharge on the Open

access consumers will impede competition and power market in the State.

(iii) Double consideration of Transmission charge: Any consumer availing Open

access to the ISTS system also pays its ISTS cost for the Open access, the

benefit of which accrues to the State in reduction of their POC charges. This

reduction is due to the clause 11(3) of the CERC (Sharing of IST charges and

losses) Regulations 2020. In view of that inclusion of ISTS charges again for

computation of Additional surcharge as claimed by the Petitioner, will lead to

double levy of the same charge on open access consumers.

4.5.2. TANGEDCO‟s reply on the above comments:-

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(i) The procedure for arriving stranded capacity has been clearly mentioned in the

order of M.P.No.30 of 2021 dt.28.09.2021 in para no.6.20 which is reproduced as

follows.

6.20.1. The petitioner is obligated to demonstrate that its power purchase

commitments was continued to be stranded during the period under question
and the petitioner had unavoidable obligation (Two part tariff) to bear fixed cost
for such contracts as stipulated under Regulation 24(2) of the TNERC (Grid
Connectivity and Intra State Open Access) Regulations, 2014.
6.20.2. The petitioner has submitted the 15 minutes block-wise data obtained
from the State Load Despatch Centre in respect of the capacity available and
scheduled details of the Distribution licensee & Open Access Consumers.
6.20.3. The Commission has carefully gone through the details furnished by
the Petitioner. Whatever the block-wise quantum was scheduled by the SLDC,
it has been compared against the “available capacity” in the corresponding
block the unscheduled quantum under each block is considered as “Capacity
not availed” under respective block. The average unscheduled capacity
(stranded capacity) of the petitioner’s conventional plants is 2578.52 MW;
however, the stranded capacity due to such Open access purchase (viz., 3rd
party purchase, IEX, Power Exchange, etc.,) alone is to be quantified.
6.20.4. The petitioner has provided the quantum of power purchased by the
Open Access consumer in each 15 minutes block during the period from
October 2020 to March 2021. The petitioner / SLDC has provided such data.
The block wise stranded capacity i.e., “Capacity not availed” has been
compared with the energy scheduled by the Open Access consumers; the
comparison is made to justify that since the claim can be only with reference to
thirty party purchase, IEX, Power exchange etc., In every block, the least of the
“OA scheduled energy” or “Capacity not availed” is considered to arrive at the
“Average stranded capacity” for the entire period of six months i.e., October
2020 to March 2021. The data furnished in this petition is scrutinised with
reference to the petitioner / SLDC’s data and corrected wherever required.
From this comparison, we find that, there is an average stranded capacity of
597.11 MW due to Open access consumers during the six months period.

17
 TANGEDCO has followed the same methodology in this petition also for

arriving the stranded capacity and demonstrated the stranded capacity. Further

TANGEDCO submitted the 15 minutes block data (Availability, Scheduled and

OA availed) to the Hon‟ble TNERC in soft copy due to the voluminous of data.

(ii) Transmission charges are also the part of power purchase expenses which are

paid by TANGEDCO for the transmission of interstate and intra state power. It

is considered as fixed expenses and incurred for power purchase. TANGEDCO

pays Transmission charges to PGCIL for using ISTS lines procure power from

CGS, IPP‟s through LTOA, MTOA Contracts. The charges claimed by PGCIL

and paid by TANGEDCO is after deducting the credit for STOA charges only.

Therefore Rs.2918.98 crores claimed in the petition is inclusive of STOA credit

adjustment and considered in the book of accounts. Hence there is no double

claim.

4.6. M/s.Tamil Nadu Spinning Mills Association, Dindigul :

4.6.1. Comments are detailed below –

(i) Additional surcharge cannot be levied in case open access is provided to a

person who has established a captive generating plant for carrying the

electricity to the destination of his own use. The prayer leads to any OA

consumer being levied with the Additional surcharge.

(ii) TANGEDCO exaggerated its own installed capacity very high by taking into

other installations owned by the respective CGPs. The capacities owned by

other CGPs, having different ownerships ought to be omitted as they are not

the installations owned by the TANGEDCO alone.

(iii) apart from the Open Access Captive Power wheeled from CGPS, any other

Open Access Power availed or sourced from the Green Energy is not
18
 subjected to levy of Additional Surcharge, as per the specific bar as made

available. The applicability of levy of Additional Surcharge has to be

modified to the extent as barred by the introduction of both the Electricity

(Promoting Renewable Energy through Open Access) Rules 2022.

(iv) in order to determine the levy of Additional Surcharge, the fixed cost due to

power capacities, remaining stranded, is to be conclusively demonstrated,

as per the then existing power purchase agreements executed and that

such stranding also continues. Any petition seeking approval for levy of

Additional Surcharge should be in consonance with the provisions of the

Electricity Act 2003 and the guidelines provided under the Grid Connectivity

and Intra State Open Access Regulations 2014 of the Commission, more

particularly as made out in Clause 24 of the Regulation thereof. The

aforesaid conditions are not satisfied in the instant Petition. Therefore, the

instant Petition filed by the TANGEDCO in M.P. No. 41 of 2022, deserves to

be dismissed by the Commission straightaway, even without admitting it.

(v) Additional Surcharge can be claimed, only when the TANGEDCO clearly

demonstrates that it has been able to meet its peak demand during the

period from April 2022- September 2022 and there was no load shedding

absolutely enforced during such peak demand periods. with the reference to

the approval provided to the TANGEDCO to procure Short-Term Power and

RE Power, to the tune of 1000 MW RTC Power during the respective

periods, the TANGEDCO still needs procurement of power to meet out its

requirements and therefore, the claim of the TANGEDCO that it has

continuous stranded capacity is not demonstrated properly.

(vi) The method of fixation of the Wheeling Charges / Network Charges have

already been factored fixed costs in order to arrive the Wheeling Charges /
19
 Network Charges and therefore, in the guise of meeting out the fixed charges.

Additional Surcharge cannot be levied once again as it would amount to be

double taxation.

(vii) As per the proviso Clause under Clause 24 of the Grid Connectivity and

ISOA Regulations 2014, the levy of Additional Surcharge is made applicable

only in respect of "New Open Access Customer".

(viii) Different categories OA consumers have different pattern of OA consumption.

There are consumers who purchase power through Exchange platform, based

on their day-to-day requirement basis. On the other hand, there are other

types of Open Access Consumers like captive Open Access

Consumers/Medium Open Access Consumers whose consumption pattern is

known well in advance to the DISCOM and thereby, minimizing the stranded

capacity on their account, is always possible and open. This fact of the

availability of different types of consumers has to be analyzed thoroughly

before deciding anything on the proposal to levy Additional Surcharge.

Accordingly, the Commission may seek to determine the Additional

Surcharge, if required, for each of such categories, so that unnecessary

burden of the surcharge on consumers, who do not contribute for the

stranding of capacity, is not anyway imposed unwantedly.

(ix) Open access consumer procures power based on its requirement, from

sources other than the Distribution Licensee, and TANGEDCO avoids

procuring power on its own, under Merit order (i.e.,) highest variable cost

generation is avoided first than the second highest variable cost generation.

(x) While computing the rate of CSS, took into account of the demand charges

paid by the Open Access consumers to the Distribution licensee. Therefore

such a fixed cost is already factored. It is incurred by the OA consumers, while

20
 they source power from Open access sources, as per the rates determined by

the Commission. Therefore, the fixed component of CSS has to be adjusted

while determining Additional Surcharge.

4.6.2. TANGEDCO‟s reply on the above comments:-

(i) As per Regulation 24 (4) additional surcharge could not be levied for the captive
use.
---
24(4) Provided that such additional surcharges shall not be levied in case
distribution access is provided to a person who has established a captive
generation plant for carrying the electricity from such plant to the
destination of his own use.
Hence there is no financial implication due to additional surcharge to the OA

consumers availing captive power through Open access.

(ii) The installed capacity of TANGEDCO is different from Contracted capacity of

TANGEDCO. The Contracted capacity as on 31.03.2021 excluding third party

and captive users is clearly mentioned in the petition. The details are being

updated and available in www.tantransco.gov.in in SLDC daily report. The

installed capacity of TANGEDCO inclusive of captive plants are 33,877.31 MW

and contracted capacity of TANGEDCO is 24109.53 MW. Hence the details

furnished in the petition are correct and factual only.

(iii) Section 42 (4) of the Act provides following provisions related to „Additional
Surcharge‟.
“Where the State Commission permits a consumer or class of consumers to
receive supply of electricity from a person other than the distribution licensee of
his area of supply, such consumer shall be liable to pay an additional surcharge
on the charges of wheeling, as may be specified by the State Commission, to

21
 meet the fixed cost of such distribution licensee arising out of his obligation to
supply.”
In addition, Section 8.5 of the National Tariff Policy provides with calculation of

cross subsidy surcharge and applicability of additional surcharge to be paid by

open access consumers.

“National Electricity Policy lays down that the amount of cross-subsidy surcharge
and the additional surcharge to be levied from consumers who are permitted
open access should not be so onerous that it eliminates competition which is
intended to be fostered in generation and supply of power directly to the
consumers through open access.”

“8.5.4 The additional surcharge for obligation to supply as per section 42(4) of
the Act should become applicable only if it is conclusively demonstrated that the
obligation of a licensee, in terms of existing power purchase commitments, has
been and continues to be stranded, or there is an unavoidable obligation and
incidence to bear fixed costs consequent to such a contract. The fixed costs
related to network assets would be recovered through wheeling charges.”

The Regulation 24 of TNERC (Grid connectivity and Intra-State Open Access)

Regulations, 2014, provides following provisions, which deal with „Additional

Surcharge‟.

Hence the petition is filed as per the above provisions of Acts, Regulations and

National Tariff policy only.

(v) TANGEDCO has submitted the 15 minutes block data (Availability, Scheduled

and OA availed) for the period from October 2021 to March 2022 only to the

Commission with soft copy due to the voluminous of data. The demand of Tamil

Nadu is met through various generation sources including own and power

purchase and their availability is continuously being monitored to arrive the

strand capacity as stated in Para No.6.20 of M.P.No.30 of 2021 dt.28.09.2021

22
(vi) The levy of additional surcharge from OA consumers is a regular phenomena to

compensate the fixed cost commitments of Discoms arising out of stranded

capacity along with the retail tariff. The levy of additional surcharge was already

upheld by the Hon‟ble Supreme Court in SESA Sterlite v. OERC (2014) 8 SCC

444 @ para 25.and Hon‟ble Appeal No. 154 of 2016 dated 09.08.2019, Birla

Textile Mills & Ors. v. Himachal Pradesh Electricity Regulatory

Commission & Ors. Hence the methodology of filing additional surcharge is

different from fixation of retail tariff. The levy of additional surcharge has been

upheld by the Hon‟ble APTEL in Appeal No 177 of 2021 in para No 203. Further

the revenue collected from open access consumers in the form of wheeling

charges, additional surcharge is deducted from the ARR of TANGEDCO to arrive

at net ARR to be collected from retail consumers in the form of energy and fixed

demand charges in retail tariff.

(vii) The open access consumers are applying for Open Access Transactions in

every month based on Open Access application and „No Objection Certificate‟

issued by the Distribution Licensee. The Scheduling is permitted on day basis or

monthly basis and sometime open access consumers are buying power even slot

wise. Therefore all the transactions done by the Open Access consumers are

treated as new every month. This has been clearly defined by the Gujarat ERC in

its order dated 12.03.2014 in the Petition No.1302 of 2013. The same analogy is

applied for levy of additional surcharge by the TNERC for all the open access

consumers who apply during the period of determination of additional surcharge.

(viii) The DISCOM is always in the obligation to maintain the stranded capacity

taking into account the open access consumers because it does not know when

the open access consumer will buy in IEX and when it will avail supply from the

DISCOM and thus serves as a standby to the open access consumer. It is very
23
 difficult to fix category wise stranded capacity for third party open access which

includes RE power, Power Exchanges and thermal categories. The Number of

consumers and demand varies day to day even some time slot to slot depends

upon market price and availability of wind and solar power. The infirm nature of

RE power and fluctuation in demand supply the existing procedure for

determination of additional surcharge is mostly used in other ERC and it is in line

with the regulations.

(ix) For instance the OA consumer purchased 669 MW on Sunday (20.03.2022) and

113 MW on Monday (21.03.2022) from the IEX. On Monday the purchase in the

IEX by Open Access consumers is very less for which the DISCOM had supplied

that power (556 MW). The DISCOM is always under obligation to maintain the

stranded capacity taking into account the open access consumers because it

does not know when the open access consumer will buy in IEX and when it will

avail supply from the DISCOM and thus serves as a standby to the open access

consumer. It is very difficult to fix category wise stranded capacity for third party

open access which includes RE power, Power Exchanges and thermal

categories. The Number of consumers and demand varies day to day even

some time slot to slot depends upon market price and availability of wind and

solar power. The infirm nature of RE power and fluctuation in demand supply the

existing procedure for determination of additional surcharge is mostly used in

other ERC and it is in line with the regulations.

Moreover, without any load shedding in the state DISCOM had already met its

peak demand of 17653 MW on 29.04.2022 during April 2022 to September

2022.

It is clear that the stranded capacity has been considered only due to open

access (excluding captive) and demonstrated the stranded capacity. Further

24
 open access consumers burden the DISCOM‟s power procurement planning

and SLDC‟s grid management by frequently switching source from open access

to TANGEDCO and vice versa. There is no definite power availment plan by

open access consumers for all 96 blocks 365 days in a year, putting DISCOM in

jeopardy.

(x) The levy of cross subsidy surcharge and additional surcharge are different

purposes and the same was concluded by the Hon‟ble Supreme court in the

case of, SESA Sterlite v. OERC (2014) 8 SCC 444 wherein it is clearly

mentioned the levy of additional surcharge and cross subsidy are essential.

4.7. M/s.The Southern India Mills’ Association, Coimbatore:

4.7.1. Comments are detailed below –

(i) In the recent Tariff Order No.8 of 2022 dated 9.9.2022, the Commission

determined Transmission charges and hence taking into consideration the revised

Transmission charges collected by the TANGEDCO, the Transmission charges to be

determined now. The exact transmission charges for the purpose of arriving fixed

capacity charges is to be re-determined. Further, request to consider the revised

Demand charges was increased in the retail Tariff Order from Rs.350 to Rs.550 per

kVA. It is prayed to calculate and determine the Demand charges to be deducted

from the Fixed charges.

(ii) As per the National Tariff policy, the fixation of Additional Surcharge should

not eliminate the competition in the power sector. The present Cross subsidy

surcharge as determined by the Commission in the Retail T.O. is Rs.1.79 per Unit in

25
11 kV supply. As per the revised OA charges, it totally comes around Rs.3.74 per

Unit. It requires adequate consideration by the Commission.

(iii) It is the Order of the Commission that TANGEDCO has to file the petition

twice a year over a period of six months even in the absence of stranded capacity.

However, TANGEDCO have considered the seriousness or accuracy of it.

(iv) Even in the current period of February and March 2023, the TANGEDCO is

venturing into buying short term and medium term open access to meet the power

requirements. While so, how the TANGEDCO could claim the stranded capacity

during the petition period.

4.7.2. TANGEDCO‟s reply on the above comments:-

(i) The demand charges / Transmission charges collected for the period

01.10.2021 to 31.03.2022 is as per the prevailing tariff order and the capacity of

strand capacity for the period of 01.10.2021 to 31.03.2022 has been considered for

arriving the additional Surcharge.

(ii) The levy of additional surcharge from OA consumers is a regular phenomena to

compensate the fixed cost commitments of Discoms arising out of stranded capacity

along with the retail tariff. The levy of additional surcharge was already upheld by

the as Hon‟ble Supreme Court in SESA Sterlite v. OERC (2014) 8 SCC 444 @ para

25.and Hon‟ble Appeal No. 154 of 2016 dated 09.08.2019, Birla Textile Mills &

Ors. v. Himachal Pradesh Electricity Regulatory Commission & Ors. Hence the

levy of additional surcharge is different from retail tariff. The levy of additional

surcharge has been upheld by the Hon‟ble APTEL in Appeal No 177 of 2021 in para
26
No 203. Hence the levy of additional surcharge is different from retail tariff and other

charges.

(iii) TANGEDCO has filed the additional surcharge petition regularly in the period of

six months and this petition got delayed due to issuance and implementation of retail

Tariff and other issues.

(iv) TANGEDCO, being a DISCOM is duty bound to execute the contracts for

purchase of power within the Merit Order despatch stack for such a quantum that

they are able to supply to the consumers under various conditions, including outages

of the generating units, transmission constraints, peak demand in a particular season

considering seasonal load variations, and also increase in demand due to addition of

new consumers/loads. In this context, short term &medium power procurement are

carried out to ensure the benefit of public during various important occasions

including urban local elections public exams for schools/colleges in summer.

4.8. M/s. India Tax Payers Organisation :

4.8.1. Comments are detailed below –

(i) Under Section 40 of the Electricity Act, 2003, the Surcharge shall not be

leviable in case of Open access is provided to a person who has established

a captive generating plant for carrying the electricity to the destination of his

own use.

(ii) The additional surcharge is not applicable to Green sources such as Wind

and Solar.

4.8.2. TANGEDCO‟s reply on the above comments:-

27
(i) The additional surcharge has been arrived as per the procedure approved in

the M.P.No.18 of 2020 dt.15.04.2021. The additional surcharge amount

depends upon quantum of stranded capacity, open access allowed and fixed

cost incurred towards power purchase.

(ii) The additional surcharge is levied as per section 42(4) of the Electricity Act

2003 and Regulation 24 of TNERC‟s Grid Connectivity and Intrastate OA

Regulations 2014 only. The same are yet to be amended as to Green Energy

Open Access.

5. Findings of the Commission on the petition filed for determination of

Additional Surcharge :

5.1. The petitioner has filed this M.P.41 of 2022 for determination of Additional

Surcharge payable by Open Access consumers under TNERC (Grid connectivity

and Intra-State Open Access) Regulations 2014 based on the recent six months

data (from 01-10-2021 to 31-03-2022) applicable for the period from 01-10-2022 to

31-03-2023.

5.2. The Commission directed the petitioner (TANGEDCO) in its order for

determination of Additional Surcharge in its Order dated 15.04.2021 in M.P.No.18 of

2020, as below; a similar direction was reiterated in subsequent M.P.No.30 of 2022

also. –

“8.23. Directions to the Tamil Nadu Generation and Distribution

Corporation Limited:

TANGEDCO is directed to file the petition, to determine the applicability of the

Additional Surcharge, on six monthly basis as directed under Regulation 24(3)

28
 of the TNERC Grid Connectivity and Intra State Open Access Regulations.

Therefore, even there is no stranded capacity, TANGEDCO shall have to file

the necessary details as considered in this petition periodically.

TANGEDCO shall obtain the 15 minutes block wise data in respect of the

Capacity available, Power scheduled by the TANGEDCO, Power scheduled by

the Open Access consumers (for both Non-Renewable energy & Renewable

energy), so as to file the details at the time of filing the petition for Additional

surcharge.

TANGEDCO shall strive to maintain the optimum availability of power, so as to

avoid the payment of fixed charges on the stranded availability.”

5.3. The petitioner has filed the petition along with the calculation of Additional

surcharge in the format approved by the Commission in M.P.18 of 2020. The

petitioner also provided the 15 minutes block wise data in respect of the Capacity

available, Power scheduling details, the quantum of power scheduled by the Open

Access consumers, for the six months period from 01.10.2021 to 31.03.2022.

5.4. M.P.No.41 of 2022 filed by the TANGEDCO was admitted by the Commission

on 23.01.2023 and after hearing brief arguments, the Commission issued the

following „Daily Order‟ on that day –

“DAILY ORDER - 23-01-2023

Tvl.N.Kumanan and A.P.Venkatachalapathy, Standing Counsels for the

petitioner appeared. Brief arguments heard. Petition admitted. TANGEDCO

and Registry of the Commission are directed to webhost the petition in their
29
 respective websites for seeking comments of the stakeholders. 15 days time

shall be given from the date of order for comments. The case is adjourned to

16.02.2023 for further hearing.”

The TANGEDCO made its petition (including the typed set) available in their website

(www.tangedco.gov.in) from 23.01.2023 to 06.02.2023 seeking comments from the

stakeholders‟ as directed by the Commission in the above Daily Order. The Registry

of the Commission also webhosted the petition (including the typed set) upto

07.01.2023 in the TNERC‟s website inviting comments from the Stakeholders.

5.5. The petitioner, TANGEDCO in its additional affidavit filed on 16.02.2023

furnished the replies on the comments received from 6 stakeholders with reference

to the legal provisions and the procedure adopted by them.

5.6. The Commission has gone through the comments of the stakeholders and the

replies given by the TANGEDCO with reference to the standardised procedure

formulated by the Commission based on the Orders passed in M.P.18 of 2020 dated

15.04.2021 and M.P.30 of 2021 dated 29.09.2021 and taken into consideration in

this Order.

5.7. Under Section 42 (4) of the Electricity Act 2003 as below, the chargeability of

Additional Surcharge has been defined.

“42. Duties of distribution licensee and open access –

xxxx xxxx

30
 (4) Where the State Commission permits a consumer or class of

consumers to receive supply of electricity from a person other than the

distribution licensee of his area of supply, such consumer shall be liable to

pay an additional surcharge on the charges of wheeling, as may be specified

by the State Commission, to meet the fixed cost of such distribution licensee

arising out of his obligation to supply.”

5.8. The Commission has set out the applicability and other provisions of

“Additional Surcharge” under TNERC (Grid Connectivity and Intra-State Open

Access) Regulations 2014, as below :-

“24. Additional Surcharge:–

(1) An open access customer, receiving supply of electricity from a person

other than the distribution licensee of his area of supply, shall pay to the

distribution licensee an additional surcharge on the charges of wheeling, in

addition to wheeling charges and cross-subsidy surcharge, to meet out the

fixed cost of such distribution licensee arising out of his obligation to supply

as provided under subsection (4) of section 42 of the Act.

(2) This additional surcharge shall become applicable only if the obligation of

the licensee in terms of power purchase commitments has been and

continues to be stranded or there is an unavoidable obligation and incidence

to bear fixed costs consequent to such a contract. However, the fixed costs

related to network assets would be recovered through wheeling charges.

(3) The distribution licensee shall submit to the Commission on six monthly

basis, a detailed calculation statement of fixed cost which the licensee is

31
 incurring towards his obligation to supply. The Commission shall scrutinize the

statement of calculation of fixed cost submitted by the distribution licensee

and obtain objections, if any, and determine the amount of additional

surcharge:

Provided that any additional surcharge so determined by the Commission

shall be applicable only to the new open access customers.

(4) Additional surcharge determined on per unit basis shall be payable, on

monthly basis, by the open access customers based on the actual energy

drawn during the month through open access:

Provided that such additional surcharges shall not be levied in case

distribution access is provided to a person who has established a captive

generation plant for carrying the electricity from such plant to the destination

of his own use.”

5.9. The petitioner has filed the Maximum availability, Average availability,

Maximum scheduled quantum, Average scheduled quantum, Capacity not availed

for scheduling (Maximum, Minimum, Average), Scheduled Open Access quantum

(Maximum, Minimum, Average), Stranded capacity due to Open Access and Net

stranded charges to be recovered.

5.10. In this petition, TANGEDCO has stated that it‟s total Contracted capacity is

24,109.53 MW. During the period of October 2021 to March 2022, it had maximum

availability of 20,360.74 MW including RE power. Maximum scheduling was

19,552.61 MW with an average of 11,001.61 MW. Hence, the average capacity

stranded during the period was 1598.96 MW. However, the petitioner restricted the
32
claim for stranded capacity prevailed in corresponding blocks and limiting to the

quantum of OA scheduled. The fixed cost incurred by the petitioner was Rs.7890.81

Crores during the period from 10/2021 to 3/2022. Considering the above data, the

petitioner has claimed the Additional Surcharge to be determined at Re.0.88 per

Unit.

5.11. It has been pointed out by some of the stakeholders that the Additional

surcharge can be claimed by the Discom only when it is able to demonstrate on 15

minutes time block basis that the power had been continuously stranded throughout

the period of six months. In this regard, the Commission has obtained the 15 minutes

block wise data for the TANGEDCO‟s Power availability, Scheduled quantum and

stranded quantum. The details so furnished were taken into consideration for

determination of Additional surcharge.

5.12. As per National Tariff Policy 2016, the additional surcharge is applicable only

under the circumstance that the licensee is able to demonstrate its unavoidable

obligation of fixed costs towards the surplus power available in the said period.

“National Tariff Policy 2016

8.5.4 The additional surcharge for obligation to supply as per section

42(4) of the Act should become applicable only if it is conclusively

demonstrated that the obligation of a licensee, in terms of existing

power purchase commitments, has been and continues to be

stranded, or there is an unavoidable obligation and incidence to bear

fixed costs consequent to such a contract. The fixed costs related to

network assets would be recovered through wheeling charges.

33
In this petition, TANGEDCO has furnished details of block-wise capacity of power

available and its available capacity backed down during the block of OA power

availed. These details were taken into consideration in this exercise along with the

Renewable energy details furnished by the TANGEDCO.

5.13. The Commission has carefully gone through the comments furnished by the

stakeholders and the replies furnished by the TANGEDCO. Most of the comments

given on this M.P.41 of 2022 are similar to those comments received against the

earlier petitions filed by the TANGEDCO for determination of Additional surcharge

viz., M.P.18 of 2020 and M.P.30 of 2021.

5.14. All those comments were taken into consideration by the Commission, in this

process of determination of additional surcharge.

5.15. While considering the similar appealing contentions against the Order in

M.P.18 of 2021 of the Commission, Hon‟ble APTEL opined in Appeal No.177 of 2021

dated 15.11.2021 as below and upheld the methodology adopted by the TNERC

dismissing all the objections.

“203. We also note that if the contentions of the Appellants were to be

accepted, it would tantamount to requiring all other consumers of
TANGEDCO to bear the burden of choice exercised by open access
customers. We also agree with the State Commission that it is unfair to
saddle other consumers with such unrecovered cost.

204. In view of the above we are of the considered opinion that the
Impugned Order dated 15.04.2021 passed by the Respondent No.1/

34
 TNERC in the M.P.No. 18 of 2020 does not call for any interference by
this Tribunal and accordingly the Appeal No. 177 of 2021 is dismissed
as devoid of merit.”

5.16. Determinants of Additional Surcharge:

5.16.1. Under Section 42(4) of the Electricity Act 2003, the Additional surcharge shall

be levied to meet the fixed cost incurred by the distribution licensee arising out of his

obligation to supply. Under Regulation 24(2) of Grid connectivity and Intra state open

access Regulations, the Additional surcharge shall become applicable only if the

obligation of the licensee in terms of power purchase commitments has been and

continues to be stranded or there is an unavoidable obligation and incidence to bear

the fixed costs consequent to such contract. However, the fixed costs related to

network assets would be recovered through wheeling charges.

5.16.2. In order to justify the claim of Additional Surcharge, the petitioner has to

provide the Fixed capacity charges incurred by the petitioner towards the available

capacity in terms of power purchase commitment which has been continuously

stranded. Accordingly, the petitioner (TANGEDCO) has provided the details of Fixed

charges and Block-wise availability & power scheduled details. These are taken into

scrutiny by the Commission with reference to regulation 24(3) which requires

submission of details with reference to fixed cost by the licensee.

5.16.3. With regard to Transmission charges and Demand charges, one of the

stakeholder has requested to consider the rate of Demand charges and

Transmission charges determined by the Commission under T.O.No.7 of 2022 and

T.O.8 of 2022 dated 09.09.2022, in determination of Additional surcharge for the

period in question. In this connection, the Commission considers it would be

35
appropriate that to adopt the rate of Demand charges and Transmission/Wheeling

charges relevant to such period, as furnished by the petitioner, since this is the

exercise to find the actual fixed charges related stranded capacity pertaining to the

period from 10/2021 to 03/2022.

5.17. Determination of Fixed capacity charges incurred by the Petitioner during

October 2021 to March 2022:

5.17.1. Under Regulation 24 (3) of the TNERC (Grid Connectivity and Intra-

State Open Access) Regulations, 2014, the distribution licensee shall have to submit

a detailed calculation statement of fixed cost incurred towards its obligation to

supply. The Commission shall scrutinise the calculation statement for the

determination of Additional Surcharge. Accordingly, the petitioner has submitted the

details of Fixed capacity charges incurred / paid for its (i) Own generating station and

(ii) Other sources from which power purchased. TANGEDCO has worked out its

Fixed capacity charges as Rs.7,890.81 Crores for the period of six months. The

petitioner has submitted the details duly certified by the Chartered Accountants.

5.17.2. Though in this petition TANGEDCO submitted its Fixed charges details

on actual bases as certified by the Auditors, Commission hereby views that it would

be appropriate to consider the Fixed capacity charges as approved in the Tariff

Order No.7 of 2022 dated 09.09.2022 for TANGEDCO‟s own plants for the period

2021-22, and calculated accordingly as below.-

Table-1 : Calculation of Fixed cost i.r.o. TANGEDCO’s own generating stations

for the period from October 2021 to March 2022

36
 Net Fixed cost
Claimed approved (w.r.to
Fixed cost components
Amount T.O.7 of 2022)

(Rs. in crores)
Depreciation 303.77 755.81
Interest on Loan capital 2416.56 2283.83
Interest on Working capital 251.14 241.24
Return on Equity 279.12 0.00
O&M expenses 1217.58 853.91
Other Interest / debits 15.31 0.00
Prior period charges 0 0.00
Subtotal 4483.48 4134.79
Other income 147.86 53.60
Net fixed cost - Own generating
4335.62 4081.19
stations

5.17.3. The components of fixed cost viz., Depreciation, Interest on Loan capital,

Interest on Working capital, O&M expenses net off other income arrived as above by

disallowing the Return on Equity. Though the petitioner has claimed its Fixed

charges based on actual in respect of the above items, the claim towards

depreciation seems to be claimed with abnormal variation on its assets, hence fixed

cost including the value of depreciation arrived based on T.O.No.7 of 2022 as above.

5.17.4. Calculation of Fixed Capacity charges incurred by the Petitioner towards

Power purchase from Other Sources:

5.17.4.1. The petitioner has sought approval of fixed capacity charges incurred

by it for the period from October 2021 to March 2022 towards Central Generating

37
Stations (CGS), Independent Power Producers, Renewable energy purchase and

other Long term Power purchase agreements.

5.17.4.2. The Fixed capacity charges claimed in respect of CGS have already

been approved by the Central Electricity Regulatory Commission and the FCC

claimed in respect of IPP, Renewables and Long Term power purchase have also

been approved by this Commission. Hence, the Commission is hereby approves the

claim for calculation of the cost of stranded capacity as prayed for.

5.17.5. The consolidate Fixed capacity charges in respect of the petitioner is

calculated as below for the period of six months.

Calculation of Consolidate Fixed capacity charges for the period from October
2021 to March 2022 (All the sources of Power purchases) :
Table – 2
Fixed Cost
approved by
S. Quantum
Sources Fixed Cost the TNERC
No (MU)
(based on
T.O.7 of 2022)
I Own Generation (Rs. in Crore)
Kundha 1130.327 662.77 246.51
Kadamparai 561.230 479.25 110.74
Erode 523.620 626.52 321.85
Tirunelveli 682.198 418.53 170.80
NCPTS Stage-I 1320.923 709.46 606.96
NCTPS Stage .II 2621.008 112.01 606.67
M.T.P.S Stage-I 2280.317 95.49 403.06
M.T.P.S Stage.II 1222.196 113.72 441.18
T.T.P.S. 2447.260 180.84 627.31
Kovil Kalapal 69.757 307.11 105.99
Valuther Phase -I & II 530.130 131.37 153.79
Kuttalam 187.599 259.37 105.62
38
 Basin Bridge 239.19 180.70

Total 13576.565 4,335.62 4,081.20

II C.G.S.
Neyveli Lignite Corpn Ltd. TS-II 1294.680 97.66 104.92
Neyveli Lignite Corpn Ltd. Expn.TS-I 810.861 79.75 76.67
Neyveli Lignite Corpn Ltd. Expn.TS-II 445.577 98.94 113.50
NLC/NNTPP 1897.358 352.54 356.08
NTPC/SR 1515.264 128.53 130.56
NTPC/SR STAGE -III 399.270 34.26 38.21
NTPC/KUDIGI 626.655 180.12 190.90
NTPC/TALCHER 1784.189 133.98 132.30
NTPC/ER 115.271 10.69 11.06
NTPC/SIMHADRI ST-2 701.619 119.79 113.59
NTPC/Barh-1 2.560 0.56 0.28
NTPC/Barh-2 4.366 0.76 0.38
NTPC/KBUN 3.859 0.96 0.48
NTECL/VALLUR 3070.321 655.41 661.98
NTPL 616.421 120.53 180.43
Kudankulam Nuclear Power Corpn. 4511.149 - -
NPC/MAPS 469.596 - -
NPC/KAIGA 955.608 - -
Sub total CGS 19224.623 2,014.48 2,111.36
III IPP's
TAQA/ST-CMS 648.802 132.42 121.97
Pioneer Power(Penna) 0.000 - 2.46
Sub Total IPP 648.802 132.42 124.43
IV Renewable
Windmill 546.198 - -
Co-Generation 208.683 37.32 31.25
Bio Mass 0.847 0.11 0.15
Captive Power 11.923 - -
Solar 2929.914 - -
UI 119.914 - -
Sub Total 3817.479 37.43 31.40
V Traders (STOA)
NVVN 481.114 - -
PTC India Ltd. 29.961 - -
Manikaran Energy 0.000 - -
GMR Energy Trading Ltd. 53.871 - -
Sub Total 564.946 - -
VI Traders (MTOA)
PTC India Ltd. (Pilot-II DB Power) 160.982 24.05 12.02

39
 Sub Total 160.982 24.05 12.02
VII Traders (LTOA)
Jindal Case1 Bidding 1589.329 338.70
Opg Pvt Ltd 12.915 6.69
Coastal Energen Pvt. Ltd. 184.805 23.73
PTC India Ltd. 417.663 109.92
Dhariwal Infrastructure Ltd. 306.577 41.77
DB Power Ltd. 765.506 166.24
IL&FS Tamil Nadu Power 734.393 121.14
Bharath Aluminium 426.192 54.50
KSK Mahanadi Power 1601.413 321.30
GMR Energy Trading Ltd. 560.962 162.81
Nvvn Solar 15.010 -
Sub Total 6614.764 1,346.80 1,575.26
VIII STOA Charges
Power Exchange 4083.805 - -
SWAP 0.000 - -
Hydro Utilization 0.000 - -
Total 1 Power Purchase Cost 4083.805 - -
Grand Total (I to VII) 48691.965 7890.808 7935.676
Grand Total 1+2 48691.965 7890.808 7935.676

5.18. The Commission has calculated above Fixed capacity charges for the

determination of Additional surcharge taking into account of Fixed charges approved

for TANGEDCO‟s own stations and the Fixed costs related to other Power purchase

transactions.

5.19. Determination of Stranded capacity (for the period October 2021 to March

2022) :

5.19.1. The petitioner is obligated to demonstrate that its power purchase

commitments was continued to be stranded during the period under question and the

petitioner had unavoidable obligation (Two part tariff) to bear fixed cost for such

40
contracts as stipulated under Regulation 24(2) of the TNERC (Grid Connectivity and

Intra State Open Access) Regulations, 2014.

5.19.2. The petitioner has submitted the 15 minutes block-wise data obtained from

the State Load Despatch Centre in respect of the capacity available and scheduled

details of the Distribution licensee & Open Access Consumers.

5.19.3. The Commission has carefully gone through the details furnished by the

Petitioner. Whatever the block-wise quantum was scheduled by the SLDC, it has

been compared against the „available capacity‟ in the corresponding block; the

unscheduled quantum under each block is considered as „Capacity not availed‟

under respective block. The average unscheduled capacity (stranded capacity) of

the petitioner‟s conventional plants is 1598.96 MW; however, the stranded capacity

due to such Open access purchase (viz., 3 rd party purchase, IEX, Power Exchange,

etc.,) alone is to be quantified.

5.19.4. The petitioner has provided the quantum of power purchased by the Open

Access consumer in each 15 minutes block during the period from October 2021 to

March 2022. The petitioner / SLDC has provided such data. The block wise stranded

capacity i.e., „Capacity not availed‟ has been compared with the energy scheduled

by the Open Access consumers; the comparison is made to justify that since the

claim can be only with reference to thirty party purchase, IEX, Power exchange etc.,

In every block, the least of the „OA scheduled energy‟ or „Capacity not availed‟ is

considered to arrive at the „Average stranded capacity‟ for the entire period of six

months i.e., October 2021 to March 2022. The data furnished in this petition is

scrutinised with reference to the petitioner / SLDC‟s data and corrected wherever
41
required. From this comparison, we find that, there is an average stranded capacity

of 433.37 MW due to Open access consumers during the six months period.

5.19.5. The Commission has arrived the stranded capacity based on those power

quantum which are being scheduled by the SLDC.

5.20. Calculation of Additional surcharge payable by the Open Access

consumers:

Table-3 : Determination of Additional Surcharge payable by Open Access

consumers:

S. Description Unit Submitted

No. Nomenclatur by Approve
e TANGEDC d by
O TNERC
1 Contracted Capacity A MW 24,109.53 24,109.53

2 Maximum Availability B MW 20,360.74 16,801.02

3 Minimum Availability C MW 9,050.00 9,339.04

4 Average Availability D MW 12,600.57 12,600.57

5 Maximum Scheduled E MW 19,552.61 14,925.91

6 Minimum Scheduled F MW 5,694.99 5,696.99

7 Average Scheduled G MW 11,001.61 11,001.61

8 Capacity not availed (Max) H MW 5,374.74 5,374.74

9 Capacity not availed (Min) I MW - -0

10 Capacity not availed (Avg.) J MW 1,598.96 1,598.96

i.e., The average of block-wise
(Capacity available - Scheduled
capacity)
11 OA scheduled (Max) K MW 3,638.18 1,262.09

12 OA scheduled (Min) L MW - 44.97

13 OA scheduled (Avg.) M MW 478.41 440.27

14 Capacity stranded due to OA N MW 448.55 433.37

consumer
15 Total Fixed Charge (Approved O Rs. Cr 7,890.81 7,935.68
in T.O.7/2022)

42
16 Fixed charges per MW P=O/D Rs. Cr 0.63 0.63
available
17 Fixed charges of stranded Q=P*N Rs. Cr 280.89 272.93
capacity
18 Transmission Charges paid R Rs. Cr 2,918.98 2,918.98

19 Energy Scheduled S MU 55,540.08 55,540.08

20 Transmission Charges per kWh T=R/S*10 Rs/kWh 0.53 0.53

21 Distribution Charges (Wheeling U Rs/kWh 0.21 0.21

charges as approved in the
Tariff Order 2017)
22 Total T & D Charges per kWh V=T+U Rs/kWh 0.74 0.74

23 Energy Consumed by OA W MU 4,714.71 4,714.71

consumer from Discom (Gross
consumption less OA
scheduled energy)
24 T & D charges payable to X=W*V/10 Rs. Cr 347.03 347.03
Discoms by OA consumers
25 Demand Charges Recovered Y Rs. Cr 473.45 473.45
by Discoms from OA
26 Demand Charges to be Z=Y-X Rs. Cr 126.42 126.42
Adjusted
27 Net stranded fixed charges AA=Q-Z Rs. Cr 154.48 146.51
recoverable
28 OA scheduled adjusted energy AB MU 1,763.72 1,763.72

29 Additional surcharge AC=AA / AB 0.88 0.83

*10 Rs./kWh

5.20.1. Capacity stranded due to OA consumer:

The Commission has prudently verified the data submitted by the petitioner and

taken the availability of such source which only have been scheduled by SLDC into

account, under the items of Sl.no.2 to 10 of the above table. Though there is an

average unavailed capacity of 1598.96 MW during the said period of six month, the

block wise comparison is made only with the OA quantum to arrive at an exact

stranded capacity due to Open access consumers. In this exercise, it is found that

the average stranded capacity of licensee‟s power is 433.37 MW during the period of

October 2021 to March 2022.

43
5.20.2. Total fixed capacity charges:

Based on the actual fixed capacity charges incurred during the period from October

2021 to March 2021, the petitioner has claimed the fixed cost for Rs.7890.81 Crores

to be considered for determination of Additional surcharge in respect of its own

generating stations as well as other sources of power purchase. The Commission

has allowed the fixed cost payable to external sources of power purchase as

claimed; but the fixed cost claim towards its own generating stations is allowed with

reference to the T.O.No.7 of 2022 as explained in the Table – 1 and paras

thereunder above. The Commission hereby approves to consider the total Fixed cost

of Rs.7,935.68 Crores for the calculation of the Additional surcharge. Thus the Fixed

cost incurred per MW is calculated as Re.0.63 Crore per MW.

5.20.3. The rate of Additional Surcharge :

The Commission scrutinized the details furnished by the petitioner; based on

thorough checking of the data, arrived the actual Stranded capacity of licensee due

to OA consumers as 433.37 MW. And the Fixed cost obligation on such stranded

capacity is calculated as 272.93 Crores. The Net Demand charges arrived after

deducting the Transmission and Distribution Charges (T&D charges) absorbed for

the consumption of Discom power is taken for adjustment against „Fixed capacity

charges recoverable for stranded capacity‟. Such net stranded fixed capacity

charges divided by the actually drawn OA energy is the rate of Additional surcharge

to be recovered from the OA consumers of October 2022 to March 2023.

Thus, based on the above method of approach, the rate of Additional surcharge is

calculated and arrived at as Re.0.83 / Unit (Table – 3).

44
5.21. Moreover, the Commission has clarified on the chargeability of Additional

surcharge in M.P.No.32 of 2021 dated 08.02.2022, as below –

“8.10. Taking into account of all the above circumstances and facts,
we are of the well considered view that the Additional surcharge
shall be levied on the quantum of OA power actually drawn only as
stipulated in Regulation 24(4) of the TNERC Intra-State Open Access
Regulations 2014.”

Thus, the Commission held to levy the Additional surcharge based on the OA power

actually drawn by the OA consumer during the period concerned.

6. The Applicability of Additional Surcharge:

6.1. In view of the above findings, the Commission hereby directs the petitioner –

(i) to collect the Additional Surcharge at the rate of Re.0.83 per Unit from the

Open Access consumers on the quantum of the electricity actually drawn by

the OA consumer.

(ii) The additional surcharge of Re.0.83 per kWh is collectable by the petitioner

for the “Open Access” (OA) drawn from 25-02-2023 to 31-03-2023. Though

the petitioner has claimed to charge the additional surcharge from 01.10.2022

to 31.03.2023 in its petition, the Commission is not inclined to levy such

surcharge retrospectively duly considering the dynamic transactions held by

OA consumers taking into account of the prevailing OA charges at that time.

(iii) The Additional Surcharge as determined under the Table-3 above is

applicable to the Open Access consumers who purchase the power through

3rd party Sale and power exchanges (viz., IEX, PXI, etc.,)

45
6.2. As the methodology and formulae of determination of Additional Surcharge

has already approved by the Commission in earlier Orders taking into account of

sufficient comments obtained from the stakeholders and the methodology has also

been upheld by Hon‟ble APTEL in the judgment of A.No.177 of 2021 dated

15.11.2021, the matter can said to have reached finality. Therefore in this regard, the

rate of Additional surcharge, for subsequent period shall be determined based on the

block-wise six monthly data furnished by the licensee.

6.3. Further, the Commission hereby directs the petitioner to file the petition for

determination of the Additional Surcharge on six monthly basis in future under 24(3)

of the TNERC Grid Connectivity and Intra State Open Access Regulations, well in

advance, even though no stranded capacity was identified during a set of six months

period. 15 minutes Block wise data in respect of the power scheduled by Open

access consumers shall be filed by the petitioner in respect of both Renewable &

Non-Renewable energy along with the petition.

(Sd........) (Sd......) (Sd......)

Member (Legal) Member Chairman

/True Copy /

Secretary
Tamil Nadu Electricity
Regulatory Commission

46
 Annexure

Summary of Fixed Capacity charges of Own Generating Stations (from Oct'2021 to Mar'2022) (Rs.in Crores)
Interest Operation Prior
Interest Extra Non- Total
S. on Return and Other period Other
Name of the Plant Depreciation on loan Ordinary Tariff Fixed
No. Working on Maintenance Interest credits/ Income
capital Charges Income Cost
Capital Equity Expenses charges

1 TTPS 75.55 339.89 49.37 180.99 - 18.49 627.31

-
2 MTPS 41.76 202.81 31.19 146.15 - 18.85 403.06
-
3 NCTPS-I 77.49 363.54 36.10 131.93 - 2.10 606.96
-
4 MTPS-II 137.95 197.92 36.20 78.04 - 8.92 441.18
-
5 NCTPS-II 194.11 239.60 46.56 129.61 - 3.21 606.67
-
6 ThirumaKottai GTPS 14.58 80.93 2.92 7.64 - 0.08 105.99
-
7 Kuttalam-GTPS 17.29 70.33 5.55 12.54 - 0.08 105.62
-
8 Basin Bridge-GTPS 17.23 152.22 4.94 6.33 - 0.02 180.70
-
9 Valuthur-GTPS 19.91 114.41 6.03 13.58 - 0.15 153.79
-
10 Erode-HPS 91.40 176.13 9.08 45.20 - -0.05 321.85
-
11 Kadamparai-HPS 13.78 71.09 2.80 23.86 - 0.79 110.74
-
12 Kundah-HPS 31.97 167.90 6.14 40.96 - 0.47 246.51
-
13 Tirunelveli-HPS 22.81 107.06 4.36 37.09 - 0.52 170.80
-

TOTAL - FCC 755.81 2,283.83 241.24 853.91 - 53.60 - 4,081.20

- - -

1
2