Andhra DISCOM Proposes Cross Subsidy Surcharge of ₹2.45/kWh for Green Power Sales

The state DISCOM proposed to increase the RESCO tariff at the rate of ₹7.15/kWh


The Andhra Pradesh distribution companies (DISCOMs) have filed the Aggregate Revenue Requirement (ARR) application for the retail supply business and proposed tariffs for the financial year 2020-21.

The Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL) and the Southern Power Distribution Company of Andhra Pradesh Limited (APSPDCL) stated that the DISCOMs have been purchasing power from the Andhra Pradesh Power Generation Corporation (APGENCO) based on long-term power purchase agreements (PPAs).

Cross Subsidy Surcharge

APSPDCL expects the sales of green power (renewables) to increase under the 33 kV voltage category.

Green Power Sales Under HT Category

With the expectation of the green power sales increasing, APSPDCL has proposed introducing a cross-subsidy surcharge of ₹2.45 ($0.03)/kWh for renewables starting FY 2021-22. The DISCOM has calculated the cross-subsidy surcharge for the renewables as:

Andhra Pradesh Cross Subsidy Surcharge

The state DISCOM also released two tenders for empaneling agencies to install 8 MW of grid-connected residential rooftop solar projects between 1 kW and 500 kW in size. The solar systems will be developed under the capital expenditure model.

Tariff Revision

For the Low tension (LT-domestic) Category I-A, APEPDCL proposed to remove the monthly minimum charges in the domestic category and levy a fixed charge of ₹10 (~$0.13)/kW/month, due to which the revenue would increase by 1.07%.

For high tension Category I-B (townships, colonies, gated communities, and villas), the licensee proposed to include all new group housing societies, apartment complexes, townships, industrial colonies, and gated communities and said that they would be given single point HT connection facility under this category. The licensee noted that the existing housing societies, residents’ associations, apartment complexes, townships, and colonies might opt for this facility, and the conversion will be done free of cost. The licensee proposed to reduce the existing energy charges from ₹7 (~$0.09)/kWh to ₹5.95 (~$0.08)/kWh for this category, due to which the revenue would decrease by 14.11%.

From the LT-Category-II (function halls, auditoriums), the licensee proposed to remove the existing fixed charges of ₹100 (~$1.35)/kW/month in this category, due to which the revenue will decrease by 16% and improve the sales in this category.

The renewable energy service companies (RESCOs) draw power from the licensee. The activities of RESCOs are similar to that of the distribution licensee in implementing similar tariffs in their respective areas as approved by the Commission. APEPDCL suggested increasing the RESCO tariff at the rate of ₹7.15 (~$0.09)/kWh, which will equal the licensee’s supply cost.

Similarly, for Category-I (domestic), APSPDCL also proposed to do away with the monthly minimum charges and instead proposed a charge at the rate of ₹10 (~$0.13)/kW/month of the contracted load.  For LT-II Category (commercial and function halls), the state DISCOM removed the existing fixed charges of ₹100 (~$1.35)/kW/month in function halls to disincentive diesel generating sets and increase sales in the category.

In September this year, the government of Andhra Pradesh approved ₹9 billion (~$123 million) to meet the expenditure of the state distribution companies (DISCOMs) in line with the payment mechanism notified by the central government.

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Image credit: Sigmund