BESCOM proposes incentive scheme to bring back HT consumers in the new tariff order 2018-’19

BESCOM announced its new tariff order for FY 2018-2019. New points introduced in the order include providing incentives to the HT consumers, for them to return back to state DISCOMs and not purchase power via Open Access.

Since HT consumers have been purchasing power via Open Access, the DISCOMs are deprived of the sales to the paying consumers, in turn impacting the finances of the distribution licensees.

Base consumption:

The monthly average consumption out of energy supplied by BESCOM during the non-peak hours’ period between 10.00 Hours and 18.00 Hours of the day, during the period from 01-04-2017 to 31-03-2018 as recorded in Time of Day (ToD) meter will be reckoned as base consumption.

Incentive scheme:

  • Any excess energy consumed by the eligible consumers during the non- peak period between 10.00 Hours and 18.00 Hours, over and above the average base consumption as stated, will be allowed a discount of Rs.1.00/- per unit in the bill, to the eligible consumers.

  • Further, the eligible consumers will be allowed an incentive of Rs.2.00 per unit in the bill for the energy consumed during the period between 22.00 Hours and 06.00 Hours as against the normal ToD rebate of Re.1.00 per unit.



Exiting rates (Ps/Unit)

Proposed Incentive rates (Ps/Unit)


0-1 lakh units



above 1 lakh units



0-1 lakh units



above 1 lakh units



0-2 lakh units



above 2 lakh units



0-2 lakh units



above 2 lakh units



0-1 lakh units



above 1 lakh units


There are also some amendments in the wheeling charges applicable to the renewable generators.

  • The RE generators will be liable to pay 25% of the normal transmission charges and/or wheeling charges.

  • They will be liable to bear the applicable lines losses as decided by the commission.

  • Also be liable to other applicable charges including 2% of banking charges.

RE projects

Time period

Transmission/wheeling charges


Line losses

Wind projects

10.10.2013 to 0.09.2017

25% normal transmission/wheeling charges


Solar projects

On or earlier than 31.03.2017


The RE projects commissioned on or after 1.04.2018 shall be liable to 25% of the normal transmission and/or wheeling charges, in cash, and the applicable line losses and banking charge, in kind, as determined by the Commission in its Tariff Orders, from time-to-time, in addition to the other applicable charges.

The Captive Generators, availing of the benefit of the Renewable Energy Certificate (REC) mechanism, shall be liable to pay the normal Transmission, Wheeling, and other charges, as specified in the Commission’s Order dated 09.10.2013.

The order is in effect since 1.04.2018 until 31.02.2020 unless any other order comes into effect.


After the UPERC cancelled PPAs with Bajaj Power owned units (as reported by TOI), BESCOM (Karnataka based DISCOM) cancelled its PPA signed before 31st March of a 75.6 MW wind power plant. The state’s energy department had already issued a letter to the DISCOMs to not sign anymore PPAs  as the state has sufficient wind projects to fulfill its RPO compliance. More such cancellations from the DISCOMs are expected. The industries which are more affected by this cancellation are Gamesha, Suzlon, Inox Wind, Sembcorp Green Infra and Mytrah.


This is going to be a very discouraging development for the wind industry since a number of PPAs were signed at a higher price which is no longer being accepted by the DISCOMs. A similar development was also covered on our blog.


The article can be accessed here.


Karnataka defers implementation of Forecasting & Scheduling regulation

The  F&S regulation was notified on 31st May 2016 by Karnataka Electricity Regulatory Commission, with 6 months warming period given to all stakeholders, after which the commercial settlement scheme was to be implemented from December this year. Karnataka had become the first state in India to come out with final regulations for Forecasting and Scheduling.

However, KERC has deferred the implementation of the regulation by six months. Wind and solar generators will now be required to comply with the regulations from 1 June 2017.

The notification can be accessed here.

Draft KERC (Procurement of Energy from Renewable Sources) Fourth Amendment, Regulations 2016

KERC has notified Fourth Amendment to KERC (Procurement of Energy from Renewable Resources) Regulations on October 26th, 2016. The draft of the proposed amendment is available in The highlights of the amendment are:

  1. RPO obligation is on captive plant, grid connected plants and open access consumers only .Hence non grid connected captive plants are free from RPO obligation in Karnataka state.
  2. Every distributions licensee, captive consumer and open access consumers may purchase REC or consume electricity generated from its own Renewable Energy Power Plant whether grid connected or otherwise, to meet its RPO either entirely or partly.
  3. The obligation of distribution licensees to purchase electricity from solar energy may be fulfilled by purchase of solar REC’s only.
  4. The capacity of Renewable Energy Power Plant owned by the obligated entity shall not be less than 250Kw.

KERC has invited written comments/views/suggestions on the proposed amendment latest by November 26th 2016 from interested parties.

KERC Determines tariffs and other norms for Solar Rooftop and Small Photovoltaic Power Plants

This Order is applicable to all new grid connected solar rooftop and small solar photo voltaic power plants, entering into Power Purchase Agreement (PPA) and commissioned on or after 2nd May, 2016 and up to 31st March, 2018.

Sharing of Clean Development Mechanism (CDM) benefits between the generating company and the beneficiaries

  • 100% of gross proceeds on account of CDM benefit are to be retained by the project developer in the first year, after the date of commercial operation of the generating station,
  • In the second year, the share of distribution licensees shall be 10%, which shall be progressively increased by 10% every year till it reaches 50% and thereafter, the proceeds shall be shared in equal proportion by the generating companies and the beneficiaries.

Grid Connectivity for roof-top projects

  • 1 kW to 5 kW – single phase 230 volts
  • 5 kW to 50 kW – 3 phase 415 Volts
  • 50 kW to 1 MW – 11 kV line.


  • Metering shall be in compliance with the CEA (Installation and Operation of Meters) Regulations 2006 as amended from time to time.
  • In the case of, solar rooftop PV systems connected to LT grid of a distribution company, the concept of net metering shall be adopted and the net energy pumped into the grid shall be billed.
  • In the net -metering, the consumer is paid for the net energy i.e., the difference between energy generated from solar rooftop plant and consumed by his/her installation.
  • This concept allows only surplus energy to be injected into the grid. The Commission had proposed to continue with net-metering concept for all consumers, other than domestic consumers.
  • In the case of domestic consumers, the Commission had proposed to adopt gross metering concept where the entire energy generated by the solar rooftop plant is allowed to be injected into the grid

Note – An amendment to CEA (Installation and Operation of Meters) Regulations 2006 has been issued recently, in which a new definition of “renewable energy meter” has been introduced to extend clarity to net-metering scheme.

  • If export>import, ESCOM pays generator at the tariff determined.
  • If import > export; then generators pays to DISCOM at prevailing retail tariff.


Applicability of Wheeling and Banking Charges and Cross Subsidy Surcharge:

For solar generators going with intra-state open-access, no wheeling/banking charges or cross- subsidy charges are to be paid.

The copy of the order can be accessed here.

KERC Proposes Amendment to RPO Regulation

The Karnataka Electricity Regulatory Commission (KERC) in a recent notification has proposed an amendment to its RPO (Renewable Purchase Obligation) regulation. The amendment will come into force from the date of its publication in the official gazette.

The Proposed amendment defines the solar RPO percentages as well, which was not defined earlier and was considered to be one of the drawbacks towards promotion of solar energy technology. The targets proposed by KERC are shown in the graphs below:

The commission has also proposed new RPO targets for Captive and Open Access consumers, which are in the graphs below:

Apart from the RPO targets the commission has proposed to add the definition of “Contract Demand” and has proposed changes in some clauses as well.

Mainly the commission has proposed that any distribution licensee or other consumers failing to meet the RPO for any year within the time specified, shall purchase RECs to the extent of 110% of quantum of shortfall in meeting RPO, by 30th June of the immediately following year, failing which action under Section 142 of the Electricity Act, 2003 shall be initiated.

The amendment proposes a new way to impose penalty on the consumers failing to meet the RPO, and it directs the consumer to buy REC’s  by 10% more quantum than the total quantum of energy needed to meet RPO targets. The amendment also proposes very high RPO targets for coming years, which is a good move, but again, it will need strong enforcement guidelines from the state.

The increase in RPO targets is important, but at the same time targets without proper enforcement would not yield great results, which needs focus as many states are still being lenient over the RPO compliance by state utilities.

The commission has invited the comments from the interested stakeholder and can be submitted latest by 6th Aug 2015.

The proposed amendment and more details about it can be read here.

KERC Consultative Paper for Determination of Solar Tariff

Karnataka Regulatory Commission (KERC) In a notification dated 4th May 2015 has notified a discussion paper for the re-determination of Tariff for grid interactive megawatt scale solar power plants.

The revised tariff to be determined will be applicable to the solar plants entering into power purchase agreement between 1st April, 2015 and on or before 31st March, 2018 but excluding those projects where the tariff is discovered through bidding process.

The commission in the discussion paper has compared recent tariff orders of the states and CERC and based on that has proposed the capitals costs for solar PV projects and solar thermal projects at Rs. 5.720 Lacs and Rs. 1200 lacs per MW respectively.

The commission through a public notice has invited the comments and suggestion from the interested stake holders, which can be submitted on or before 5th June 2015.

The commission discussion paper can be read here.

KERC Revises APPC for FY 14-15 & Finalizes for FY 15-16

The Karnataka Electricity Regulatory Commission (KERC) in its order dated 31.03.2015 has finalized the APPC applicable for FY 15-16 and has also revised the APPC applicable for FY 14-15.

Previously the commission in its notification dated 30.06.2014 set the APPC rate for FY 14-15 at Rs. 3.11 per unit, but now through revision, the commission has reduced that from 3.11 per unit to 3.06 per unit for FY 14-15.

The commission in its order said that as the ESCOM’s have finalized their accounts for FY13-14 and based on the same the APPC for FY 14-15 is to be Rs. 3.06 per unit. The order also said mentioned that the difference of 5 paisa per unit shall be recovered by the ESCOM’s from the RE generators in three equal installments.

The commission in the order has also finalized the APPC applicable for FY 15-16 at Rs. 3.06 per unit, this APPC might go through another revision once the ESCOM’s will finalize their accounts for FY 14-15. The graph below gives the APPC’s given by the KERC in its various orders.

The commission order can reached here.

KERC Hikes Tariff for FY 15-16 (Open Access Getting Costlier)

The Karnataka Electricity Regulatory Commission (KERC) has approved the new tariff and open access charges for FY 15-16. The tariff for industrial consumers has been increased by 15 paisa per unit, while increase in the tariff for commercial consumers  is 20 Paisa per unit. The new tariff will be effective from 1st April 2015 onwards.

The new tariff is directly going to affect the open access transactions in the state of Karnataka, as the cross subsidy (CSS) for the open access consumers has been increased unexpectedly.  HT industrial consumers connected at 11/33 KV paying CSS of 7 paisa per unit has to pay almost 63 paisa per unit which is 9 times of current CSS, which makes the purchase of power from Independent power producers(IPP, Bilateral contracts) and power exchange(PXs, Bidding for power) an unviable option. It also opens up the opportunities for solar and group captive transactions, where CSS is zero, making such transactions most viable options in the state.

Cross Subsidy Surcharge: 

 The summary of tariff approved is given in the table below:

Industrial Tariff:  

Commercial Tariff: Commercial consumers comprising of hotels, malls, commercial buildings etc. have to pay extra 20 paisa per unit consumed by them. Commercial consumers are the highest paying consumers and this increase in the tariff is expected to impact them.

Open Access Charges:

Losses: The commission has defined wheeling loss for HT consumer at 3.79% and wheeling loss LT consumers at 8.49%.

Wheeling Charges: 

Wheeling and Banking Charges for Renewable Energy Sources: The Commission vide order dated 04.07.2014 has determined the wheeling and banking charges which is applicable to wind, mini-Hydel, bagasse based co-generation and biomass projects will continue, and for solar energy based projects, the Commission vide Order dated 18.08.2014 has exempted Solar projects in the state for 10 years is continued.

The relevant orders can be accessed here.


KERC (Karnataka) Revises Wind Tariff dated 10.10.2013

The Karnataka Electricity Regulatory commission (KERC) has revised its wind tariff on 24th Feb 2015. The new tariff will replace the tariff calculated in KERC order dated 10th October 2013.

The new tariff has been calculated at Rs. 4.50 per unit, which was Rs 4.20 per unit calculated by KERC in its earlier  order dated 10th October 2013.

The new tariff will be applicable for the projects established during the control period of five years commencing from 10th October, 2013. For the projects which have already entered into PPAs with ESCOMs from 10th October, 2013 and up to the date of this Order, the tariff as determined in this Order will be applicable.

The revision in tariff has taken place after honorable APTEL (Appellate Tribunal for Electricity ) in a hearing of a petition filed by Indian Wind Turbine Manufacturers Association (IWPA) found some irregularities (mistakes) in tariff calculation and directed the commission to revise the tariff determined.

The commission earlier through notification invited comments and suggestion on the issues of revising tariff for wind energy, which after the hearing held on 7th January 2014 has been finalized.

The KERC Order can be accessed here.

Our Previous blog post on APTEL directing KERC can be read here.

Go to top