In a recent Judgement, the Competition Commission of India (CCI) considered the case of an electricity consumer that was repeatedly denied open access permission. In this case, the consumer approached the CCI alleging “abuse of dominant position” on part of the state utilities. The case was filed by HPCL-Mittal Pipelines Limited (‘HMPL’) against denial of open access. In this case, “upstream network constraints” were cited to disallow OA application multiple times.


The CCI found that prima facie denial of open access in the above case did result in violation of Sec 4(2)(c) of the Competition Act 2002. This clause refers to “abuse of dominant position by denial of market access”. The CCI has ordered a detailed investigation in the matter.


The CCI also made certain other interesting observations in the case:


  1. In the above case, it identified “conflict of interests situation” between the various constituents of the electricity utilities like the Discom, TransCo, SLDC, etc due to “structural linkages”, i.e. common holding structure. The order states the following:

It appears that OP-2 has leveraged its dominant position in the relevant market to adversely affect the competition in the downstream market, where it is present through its group entity OP-3. The structural linkages between the OPs as depicted in the diagram illustrated earlier also points toward the conflict of interest that exists in the present case. Thus, given the conflict of interest situation that exists in the present case, anti-competitive motive behind such denial by OP-2 cannot be ruled out and may need to be tested in detailed investigation.


  1. The case dwells in depth on the jurisdiction of the CCI to rule on such cases given that the EA2003 is also a special statute that deals with all matters of electricity. The CCI finds that there are enough grounds and supporting case laws to justify its jurisdiction as far as competition related matters are concerned across all sectors.


This judgement is certainly a very interesting development for the electricity sector, as denial of open access permissions is a problem across most states. The inherent conflict of interest is evident, as often the Discom itself has to approve OA applications, in what will effectively result in taking away of its own best paying consumers.

The regulatory regime of the sector itself, especially the State Regulatory Commissions (SERCs) have so far taken a view that has supported the Discom’s, at the cost of the overall market and sector. Examples include setting of Cross-subsidy surcharges without regards to the formula and limits defined in the National Tariff Policies, upholding denial of open access in many cases, etc.


It is hoped that an outsider, for example CCI, which does not bring with it the baggage of the SERCs, or the “conflict of interest” that results from the government appointing the electricity regulator and owning the entire value chain, will catalyse real change in the electricity sector.


The Tamil Nadu Electricity Regulatory Commission (TNERC) has determined the distribution and transmission tariff for FY 2017-18. The last time they had determined tariff was in 2014 which means that the tariff has changed after 3 years. The energy charges for different categories is as follows:



The tariff for industrial and domestic categories hasn’t changed at all. Same is the case with domestic tariff.


Wheeling Charges: 21.06 Paisa/Unit

Wheeling loss: 2.45%

Cross subsidy surcharge: 1.67 Rs/kWh

The transmission tariff was also determined by the TNERC. It is as follows:


Transmission charges: 3037.30 Rs/MW/day

Transmission loss: 3.81%


The distribution and generation tariff can be accessed here. The transmission tariff can be accessed here.


DERC has released an order determining the terms and conditions for open access charges for FY 2017-18. Following are the salient features of the order:


  • Eligibility: Short Term Open Access (STOA) is applicable to consumers having a contract demand of 1 MW and above connected at 11 kV or above.

  • Metering Arrangements: The distribution licensee shall provide check meters of the same specifications as the check meters. The distribution licensee shall provide ABT compliant special energy meters at the point of drawal. The formats for availing open access approvals have also been notified

  • The 60 day timeline has also been defined for the procurement, testing and installation of ABT meters.

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The previous open access policy was announced in 2005. As of now, there are close to 60 clients in Delhi in Open Access which are trading power. As per the last policy, the quantum of energy traded had to be constant which is not the case anymore.

Earlier, an undertaking used to be taken in case of a mixed feeder which is still the case. Also, the SNAs asked for Bank Guarentee which included open accessed charges which is also still the case.

The order can be accessed here.


The HPERC has released the retail tariff for FY 2017-18 in its order. The tariff has basically remained unchanged to a large extent.


The tariff is given as follows:

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Cross Subsidy Surcharge: Rs 1.89/unit

Wheeling charges: Rs 1.83/unit

Additional Surcharge: Rs 0.49/unit

The article can be accessed here.

The press note about the same can be accessed here.

Odisha Declares Open Access Charges for 2014-15

Odisha Electricity Regulatory Commission (OERC) has determined the Open Access charges through a notification dated 11thApril 2016.

The new charges determined are applicable for FY 16-17 with effect from 11th April 2014. The details of the charges are in the table below:



The normative transmission loss at EHT (3.70%) and normative wheeling loss for HT level (8%) are applicable for the year 2016-17.

Additional Surcharge: No additional surcharge over and above the Cross-Subsidy Surcharge needs to be given to the embedded licensee.

No Cross-subsidy surcharge are payable by the consumers availing Renewable power.

20% wheeling charge is payable by the consumer drawing power from Renewable source excluding Co-generation & Bio mass power plant.

The order can be accessed here.



MERC Distribution Open Access 2016

MERC (Maharashtra Electricity Regulatory Commission) has come up with the new distribution open access regulation 2016 on 30th March 2016 in the state of Maharashtra.

The key changes in the regulation are:

  1. Allowing sourcing of power from multiple sources.
  2. Allowing sourcing of power from power exchange.
  3. Day ahead open access- The application for grant of day ahead shall be made only 1 day prior to the date of scheduling (Before it was 2 day)
  4. Consumer shall install Special Energy Meter (SEM).
  5. The draft OA regulation had proposed that a consumer having Contract Demand of 500 kW and above will be eligible for OA. However, in the final regulation the existing limit of 1MW has been retained. Had MERC lowered the limit, it would have potentially resulted in a much larger OA market in Maharashtra.
  6. Banking of Renewable Energy is introduced-

6.1.             Credit of banked energy is not permitted during the months of   April, May, October & November.

6.2.           Credit of energy banked during other months is as per the energy injected in the respective TOD (Time of Day) slots.

6.3.           Energy Banked during peak TOD slots can be credited during off-peak TOD   slots whereas energy banked during off- peak TOD slots cannot be credited during peak TOD slots.


Illustration: Energy banked during:


  • Night off-peak TOD slot (2200 hrs. – 0600 hrs.) may only be drawn in the same TOD slot.
  • Off-peak TOD slot (0600 hrs. – 0900 hrs. & 1200 hrs. – 1800 hrs.) may be drawn in the same TOD slot and also during Night off-peak TOD slot.

(The energy banked during night off peak and off-peak shall not be drawn during morning peak and evening peak)

  • Morning peak TOD slot (0900hrs – 1200hrs) may be drawn in the same TOD slot and also during off-peak and Night off-peak TOD slots.
  • Evening peak TOD slot (1800hrs- 2200hrs) may be drawn in the same TOD slot and also during Off-peak and Night off-peak TOD slots.


Impact of the Regulation

MERC has proposed a progressive open access regulation. Consumers in Maharashtra has faced various problems in the past to avail the power through open access such as power from one source only, revision of contract demand and banking of renewable power.

Multiple sources will increase the competitiveness in the market and it will promote the open access. It will also help the renewable sector to boom in Maharashtra as the rate will become more competitive.

Banking of non-firm power will be a boon for the renewable sector mainly solar. As per the credit table depicted above, the generated units in the off-peak and morning peak time can be adjusted in the peak hours.

The regulation can be accessed here.

Jharkhand notifies draft open access regulations

Jharkhand State Electricity Regulatory Commission (JSERC) notified the draft open access regulations on 1st March, 2016. The prominent features of the regulation are as follows:

  • Validity: Till 31st March, 2020
  • Eligibility to avail Open Access: 1 MW and above (not applicable in case of captive generating plants that is availing Open Access for its own use).
  • Provisions for existing consumers and generating plants availing Open Access: The entities other than the DISCOM that have already been availing open access under some agreement or government policy shall submit details such as capacity utilized, point of injection, point of drawal, duration of availing open access, peak load, average load and other such information to the STU as well as SLDC within a period of 30 days of notification of these regulations.
  • Application procedure for Open Access:

  • Day-ahead Open Access: Application to be received 3 days prior to date of scheduling of power but not later than 1300 hours of the day preceding the scheduling of power.
  • Open Access charges: The entities availing open access have to pay the transmission and wheeling charges, cross-subsidy surcharge, additional surcharge, standby charge, reactive charges and imbalance charges as determined by Jharkhand State Electricity Regulatory Commission (JSERC) from time to time.
  • Formation of Coordination Committee: Within a month of the notification of the regulations and comprising a nominee each from the DISCOM, State Transmission Utility (STU), and SLDC. The State Transmission Utility (STU). The coordination committee shall facilitate timely approvals of connectivity and open access applications.
  • Connectivity level: For consumers or generating stations or captive generators, the connectivity level shall be as follows:

  • Procedure for connectivity to intra-state transmission system:

MPERC Proposes to Revise Open Access Regulation

The Madhya Pradesh Electricity Regulatory Commission (MPERC) on 18th June 24, 2015 has proposed a new regulation for open access power transactions in the state. The proposed regulation will revise the previous open access regulation 2005. The regulation will come into force from the date of publication in the official Gazette.

The regulation will apply to open access customers for use of intra-state transmission system and distribution system, including systems when it is used in conjunction with inter-state transmission system.

The open access will be allowed for Non-conventions Energy sources, Captive Generating Plants of Conventional Energy, and to all other open access consumers with load of 1MW and above.

Categorization of Open Access Consumer:

  • Long-term Open Access: Any consumer availing open access for a period of exceeding 12 years but not exceeding 25 years.
  • Medium-term Open Access: customers availing open access for a period exceeding 3 months but not exceeding 3 years at a time.
  • Short-term Open Access: Consumer availing open access for a period up to one month at a time.

Charges for Open Access: The commission from time to time will fix (calculate) various charges to be payable by the open access consumer to the distribution licensee.

The various charges payable by the open access consumers will include Wheeling Charges, Transmission Charges, and Imbalance Charges.  The OA consumer will also bear Reactive Energy Charge, Interconnection expenses, Operating Charges, additional surcharge and any other charge levied by the commission.

Losses - Apart from this, the open access customers will have to bear energy losses of transmission system and distribution system as approved by the Commission from time to time.

Metering - Open access customers will be responsible for providing ABT compatible interface meters as main meters based on voltage, point and period of supply and tariff category.

Communication facility: The communication facility to be provided by the customer will be defined by SLDC on a case-to-case basis. The open access customer shall have to provide all such facilities.

The more details about procedure and guidelines can be read in the proposed regulations here.

Jharkhand Notifies Draft Solar Policy 2015

The Government of Jharkhand has recently notified draft for new solar policy. The new policy will be known as the Jharkhand State Solar Power Policy 2015. The new Policy will be in operation for five (5) years from the date of issuance and will remain operational till modified or superseded by a new policy.

Objectives of the Policy:

The Policy targets to achieve 2500 MW of solar energy by 2020 and with an objective of promoting local manufacturing facilities and generating employment in the state.

Minimum Target: The minimum size of the solar PV power plant at single location shall be 1 MW.  The targets of the policy are elaborated below –

Implementation Plan

1)      Utility Scale Projects:

  • Development of Solar Power Plants for Sale of Electricity to the Distribution Licensee.
  • Generations of Solar Power for Sale of Electricity to Third party or through Open Access.
  • Development of Solar Parks.
  • Development of Solar Power Plants under REC Mechanism.
  • Development of Solar Power Plants on Canals.
  • Development of Solar Power Plants under the schemes announced by Government of India.

 2)      Rooftop Solar Photovoltaic Power Plants Connected with Electricity System:

  •  Development of Solar Power plants for sale of electricity to the distribution Licensee.
  • Generation and sale of electricity to a person/entity other than distribution licensee via Open Access mode.
  • Generation, Captive Consumption and injection of surplus electricity under Net Energy Metering Mechanism.

3)      Decentralized & Off-Grid Solar ApplicationsThe Government will also promote decentralized and off grid solar applications, to meet the requirements of electricity and thermal energy, as per the guidelines issued by Ministry of New and Renewable Energy, Govt. of India.

Incentives Offered:

  • Exemption from the payment of Electricity Duty.
  • Deemed Industry Status will provided.
  • Pollution Clearance.
  • Open Access will be allowed.
  • Exemption from payment of Conversion Charges.
  • Exemption from the payment of VAT & Entry Tax.
  • Exemption from wheeling Charges.
  • Exemption from Distribution Losses.
  • Exemption from payment of Cross Subsidy Surcharge.
  • Banking for 100% of energy during all 12 months of the year.
  • Third Party Sale within or outside the State will be allowed.
  • Must run status for Solar Power Projects.
  • Renewable Energy Certificate (REC).
  • Deemed Public Private Partnership (PPP) Status..
  • Non Agriculture Status for the land where Solar Power Projects will be accorded.

Solar Purchase Obligation (SPO):

1) Solar Procurement Obligation (SPO) will be mandatory for commercial consumers with LT Industrial connection with more than 50 kVa connected load and for all HT & EHT consumers. All such consumers have to procure 4% of their power from solar source.

2) All new domestic buildings having floor area equal to or greater than 3000 sft will have at least 100 kw Solar PV system. In case of Housing Societies, 5% of energy usage should be from solar for common amenities.

3) In the potential categories to be notified like star hotels, hospitals, residential complexes with more than 50 kVA total connected load the use of solar water heating system shall be made mandatory.

Apart from all this the government also intends to promote solar manufacturing and R&D facilities in the state. Incentives to such manufacturing facilities will be provided separately. JREDA will act as Nodal Agency for all projects.

Overall the policy offers good number of incentives to the project developer, in terms of tax relaxations, must run status, exemptions from various charges etc. The policy proposes to increases the solar purchase obligation (SPO) to 4% for the consumers, which is 1% for now (as per JERC orders 2012), it also puts obligation for consumers to use the decentralized solar applications, which appears to be a good approach.

It looks promising and offers a fresh start for the state, which hasn’t seen much of the capacity addition in the solar energy sector. The state is having a total potential of more than 18 GW of solar energy. Out of this potential a target of 2.5GW can be achievable, given that the state government works positively towards it.

The Draft Policy can be accessed here.

Analysis of changes in CSS and its impact on Open Access market

Cross-subsidy regime used as a tool to influence the open access market

In this financial year (FY 2015-16), Andhra Pradesh, Telangana and MP suddenly raised cross-subsidy surcharge (CSS) applicable on industrial units significantly. In the case of AP and Telangana last years’ cross-subsidy was nil, but this year its Rs 2.23 and Rs 1.42 respectively. In the case of MP, the cross subsidy increased from Rs 0.48 to Rs 2.16 (an increase of 350%).

An analysis of several states suggests that cross-subsidy is often increased suddenly and substantially. In each of the above cases, the immediate impact will be that third-party transitions will come to a halt, as they will no longer be viable. For example, in MP the revised CSS is 46% (vs 12% last year) of the applicable tariff. In AP and Telangana, its 40% and 25% respectively.

These three states accounted for approximately 20% of the volume on power exchanges as per the market monitoring report from CERC for February (the most recent available). This volume is likely to dip to insignificance thanks to the steep rise in CSS.

Another good example is the case of Haryana. In FY 2013-14, the applicable CSS was Rs 0.53. Next year it was raised to Rs 2.02 (a four-fold increase). As a result, the traded volume between February 2014 and February 2015 has fallen by half (160 MUs and 86 MUs respectively). One must keep in mind that the above volume includes purchase from Discom’s, if any, on which CSS is not applicable. Thus, the actual fall in volume from open access consumer is must larger.

Changes on the horizon

It is clear from the above examples that cross-subsidy is varied by states to influence the open access market.

However, some fundamental changes are on the horizon. The first one pertains to applicability of CSS on renewable energy. One of the amendments proposed to the Electricity Act, 2003 seeks to remove CSS applicability from renewable energy transactions. This will have a significant impact as it will make RE transactions very attractive. One hopes that states will adopt this in its true spirit.

The second change pertains to the way CSS is calculated by the States. The existing National Tariff Policy (NTP) suggests that CSS be calculated as the difference between the top 5% of the incremental power procured by the Discom (this is often proxy for the most expensive power procured) and the applicable tariff. However, this is a very opaque measure – for example, between 2013-14 and 2015-15, the cost of top 5% of the power in MP fell from Rs 5.47 to Rs 4.59 (a fall of 20%), despite increase in overall costs and tariffs.

The amendments to NTP will require the calculations to be done by taking the overall costs (including the cost of regulatory assets, ie losses incurred by the Discom).



Further, the proposed NTP seeks to limit the CSS to 15% of the applicable tariff in the category. It is noteworthy that till now, NTP has been more recommendatory in nature. For example, it requires that CSS should be brought down progressively to bring it to 20% of the opening level by 2010-11. However, the significant changes done recently clearly indicate that this objective of the policy has not been achieved.

Team REConnect Energy


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