KERC hikes power tariff for FY15

Cost of buying electricity from DISCOMs has become costlier for the Commercial & Industrial consumers in the state of Karnataka. Karnataka Electricity Regulatory Commission (KERC) has approved a new tariff for supply of electricity in FY 2014-15. Average increase in tariff is 32 paisa against the 66 paisa increase sought by ESCOMs, tariff increase is ranging from 10 paise to 50 paise per unit for different categories of consumers and is applicable from 1st May 2014. 

Increase in Industrial Tariff:

Industrial consumers will now have to pay extra 35-40 paise per unit of electricity consumed by them.


HT-2(a) Voltage level


HT level-11 kV/33kV


66 kV & above


New opportunities have opened up for those industrial consumers availing or seeking open access, as cross subsidy(CSS) has been reduced, which makes the  purchase of power from Independent power producers(IPP, Bilateral contracts) and power exchange(PXs, Bidding for power) more viable option for the consumers giving savings from 20 paise to 50 paise per unit.

Increase in Commercial Tariff:

Commercial consumers comprising of hotels, malls, commercial buildings etc. have to pay extra 40 paisa per unit consumed by them. Commercial consumers are the highest paying consumers and this increase in the tariff is expected to impact them badly.


HT-2(b) Voltage level


HT level-11 kV/33kV


66 kV & above


Being the highest paying consumers, the saving potential for the commercial consumers is high. Sourcing power under open access from IPPs and PXs seems more viable options after decrease in the CSS. Group captive arrangement will still remain most viable option for the commercial consumers where saving potential is up to Rs 1.00 per unit.

 Open Access Charges:

KERC has also defined open access charges applicable for the FY 2014-15.


Wheeling loss 4.04% and transmission loss 3.81% defined for HT consumers


Transmission tariff of Rs. 98324/- MW/Month as against the existing tariff of Rs.95442 per MW approved for 2013-14

Wheeling charge:

Wheeling and Banking for Renewable Energy Sources:

RE generators wheeling energy to the consumers in the State have existing Wheeling (5 %) and Banking charges (2 %) which is going to continue up to 30.06.2014 or till further orders from commission.

In a nut-shell –

  1. Hike in tariff will lead to more consumers eying for open access.
  2. With CSS going down, cost of availing OA will come down. Again an added advantage for consumers to opt for OA.

Contributed by – Rahul Tyagi

KERC order on Wheeling and Banking charges for RE generators

Karnataka Electricity Regulatory Commission through an order dated 9th Oct 2013 has decided to extend the validity of order (dt – 11.07.2008) till end of current financial year, which was previously mandated to be valid only till 10th July 2013. The key points in this order are the following:

1) The wheeling charges and banking charges will continue to be 5% of the injected energy and 2% respectively along with additional UI charges between the time of injection and time of drawal.

2) Captive consumers of the state wanting to avail the benefits under the REC scheme will have to pay normal transmission, wheeling and banking charges.  

Normal wheeling charges –

For HT network –  9.85 paise per unit

For LT network – 22.99 paise per unit.

 3) Captive generators will be allowed to bank the excess energy, accounting of which will be done on monthly basis (instead of annual basis).

4) Excess energy (if any) with the distribution licensee, at the end of the month, shall be paid by the DISCOM (in whose generator is plant is situated) at the APPC rate. Currently, the APPC rate is 3.07 Rs per unit.

5) The commission will shortly issue a separate format of wheeling/banking agreement for RE generators willing to participate in REC mechanism.

HPERC finalizes its APPC for FY14

Himachal Pradesh State Electricity Commission has approved the average pooled purchase cost (APPC) for FY 2013-14 toRs 2.17 per unit. HPSEBL proposed to reduce the price from 2.20 per unit to 1.98 per unit for the FY 2013-14 (for relevant blogpost on HPSEBL’s proposition, Click Here), while demanding the new methodology and requested that forward/contra banking to be included as purchase of power.

As per our analysis the premise of calculation used by HPSEBL is logically inconsistent. Banking of power with other Discom’s for use later on is not equivalent to purchase and sale, it is equivalent to loan given to other Discom and taken back later. Thus including this power as “purchased” is incorrect.

HPERC in previous APPC order had considered only the forward banking purchase and had not considered contra-banking. According to HPSEBL, banking purchase by means of any kind of banking is definitely is a source of power which evidently must be considered for calculation of APPC.

HPERC states that outward banking (banking sale) is from out of power purchased from energy suppliers (long term and short term) during the year and its cost is already paid.  Therefore, if the same quantum is received as inward banking (contra banking purchase), such quantum and price should not be included over and above the quantum or price already taken into account, out of which such power has been banked. Since there is no criterion for determination of rate and as a prudent practice the Commission had taken such banking sale and purchase at zero cost, this quantum of energy shall be treated as additional purchase at zero cost. The Commission, therefore, decided not to accept the new methodology proposed by the HPSEB Limited, to consider the contra-banking quantum at zero cost during the year for determination of the APPC rates.

GoHP rate of free & equity power are kept different and are not included in the computation of APPC. GoHP Free & Equity Power rate is Rs.2.90 per unit.

HPERC has excluded the UI and transmission charges to calculate APPC as these are the integral part of its purchase cost.

Contributed by – Chetan Singh Adhikari

Maharashtra Not to Allow Banking of Power to Renewable Generators

In another step back on the Open Access issue in Maharashtra, MSEDCL recently rolled back the banking provision for renewable energy generators opting for open access in the state.

A recent circular released by MSEDCL has proposed new rules for banking of power generated by renewable sources and sold under open access.

The key provisions regarding banking in the new circular are:


  • If energy is supplied in excess of consumption for every 15 minute time-block, such energy will lapse (will not be allowed to be banked)
  • If energy is consumed in excess of supply for every 15 minute time-block, the applicable tariff will be that of a Temporary Power connection.


The banking related provisions are mentioned below:


6.4 It is necessary that the consumer / person who so ever has opted for Open Access shall

use the entire power contracted of Open Access Generator and ensure that the

consumption of the consumer / person in every 15 minutes time block shall match with

the energy received at the drawal point during corresponding 15 minutes time blocks.


6.5 Whenever the consumer / person is unable to match every 15 minutes time block

consumption with the energy received at the drawal point during corresponding 15

minutes time blocks, then in such situation:


6.5.1 If the net energy received at the drawal point every 15 minutes time block exceeds

the net energy actually consumed during the corresponding 15 minutes time block,

the excess energy received during the said 15 minutes time block shall be treated as

lapsed and the consumer shall neither be permitted banking of such excess energy

nor shall be paid for the same, unless there is a separate agreement for banking or

sale/purchase of this over injection.


6.5.2 The facility of banking will be applicable in case of self use only; if permissible as per

GOM policy/ MERC Order/Regulations.


6.5.3 In the reverse situation, if the net energy received at the drawal point every 15

minutes time block is less than the net energy actually consumed during the

corresponding 15 minutes time block, the excess energy consumed by the consumer

/ person during the said 15 minutes time block shall be considered as over-drawal

from the Grid and shall be billed at the rate as may be applicable from time to time

for the energy charges payable by a consumer obtaining Temporary Power (for other

purposes) supply from MSEDCL. Further, in such situation, the consumer / person

shall also be liable to pay “Electricity Duty”, “Tax on Sale of Electricity”, etc. on such

excess energy consumed from the Grid.


This will effectively bring an end to open access by wind power producers in Maharashtra, as 60-70% of the power is produced in the ‘high season’ (roughly corresponding to monsoons). In the present scenario wind producers bank the excess energy produced in the high season, to be consumed throughout the year. If such a facility is not allowed, then wind generation in the state will not remain feasible, unless power is sold to the Discom. Note that the new rules for banking of power apply only to renewable energy generators under open access (not to captive users).


The second provision, under which the consumer will be charged at “temporary power’ connection rates, rather than the regular industrial connection rates will increase the cost of power substantially. (HT Industrial Tariff is Rs 5.27/unit while the Temporary Tariff is Rs 10.12/unit. See Tariff Order for details)


In effect, this provision will end ‘open access’ in Maharashtra for renewable energy generators.



Past articles on the Open Access issues in Maharashtra:


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