The Telangana Electricity Regulatory Commission (TGERC) has set an additional surcharge of ₹0.13 (~$0.0014)/kWh on applicable open access consumers for the first half of FY 2026-27, covering the period from April 1, 2026, to September 30, 2026.

The approved surcharge represents a change from the previous six-month period. The additional surcharge for the second half of FY 2025-26, covering October 1, 2025, to March 31, 2026, had been set at NIL.

The order follows petitions filed by Telangana State Southern Power Distribution Company and Telangana State Northern Power Distribution Company seeking the determination of the additional surcharge for the period.

The distribution companies had sought an additional surcharge of ₹0.59 (~$$0.0064)/kWh, stating that the charge was required to recover fixed costs associated with contracted power capacity that remains underutilized. The utilities argued that such costs arise from stranded capacity under long-term power procurement commitments when consumers procure electricity through open access.

After reviewing the petitions, audited financial data, stakeholder submissions, and the Commission’s approved methodology for determining additional surcharge, TGERC approved a significantly lower surcharge of ₹0.13 (~$0.0014)/kWh.

As part of its assessment, the Commission revised several parameters used in the calculation of stranded costs. The fixed charges considered for the determination were revised to ₹64.54 billion (~$702.28 million), compared with ₹67.37 billion (~$733.07 million) claimed by the utilities. Transmission charges were also revised downward to ₹19.29 billion (~$209.90 million) from the claimed ₹20.98 billion (~$228.29 million).

The regulator revised the transmission and distribution charges payable by open access consumers to ₹1.14 billion (~$12.40 million), compared with the ₹1.22 billion (~$13.28 million) claimed by the utilities. At the same time, the demand charges were revised to ₹2.04 billion (~$22.20 million), compared with ₹1.96 billion (~$21.33 million)  in the utilities’ petition.

Based on these revisions, the Commission recalculated the net stranded charges recoverable from open access consumers at ₹60.4 million (~$656,453), significantly lower than the ₹266.7 million (~$2.90 million) claimed by the distribution companies. Based on projected open access sales of 451.21 million units, the Commission determined an additional surcharge of ₹0.13 (~$0.0014)/kWh, compared with the ₹0.59 (~$0.0064)/kWh requested by the utilities.

TGERC stated that the additional surcharge is intended to recover fixed costs arising from stranded power procurement commitments in accordance with Section 42(4) of the Electricity Act, 2003, and the Commission’s regulatory framework governing open access. It also noted that there appears to be continuous stranded capacity, which qualifies for an additional surcharge under the approved methodology.

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