APTEL Strikes Down Rajasthan’s Extra Surcharge on Open Access Power Users

In a major relief to large industries in Rajasthan, the Appellate Tribunal for Electricity (APTEL) has overturned a state regulator’s decision to levy an additional surcharge of ₹0.80 per unit on open access consumers.

The tribunal ruled that the Rajasthan Electricity Regulatory Commission (RERC) failed to prove that the so-called “stranded capacity” of state power distribution companies was actually caused by industries sourcing power from outside. It sent the case back to the regulator for a fresh hearing.

The verdict came after a group of industrial companies and associations — including Ambuja Cement, JK Cement Works, Lord Chloro Alkali, Rajasthan Textile Mills Association, and Rajasthan Steel Chambers — challenged RERC’s 2016 order that had cleared the surcharge in favour of the discoms.

Why the Dispute Arose

Rajasthan’s three discoms — Jaipur, Ajmer and Jodhpur Vidyut Vitran Nigams — had argued that they were being left with “stranded” generation capacity when bulk consumers switched to cheaper open access power. To cover the fixed costs of these idle plants, they asked RERC to impose an extra charge on open access users.

But industries countered that Rajasthan was in fact power-deficit, and discoms were actively buying electricity from the short-term market. They claimed that whenever power plants were backed down, it was mainly due to cost optimisation, not because of open access demand.

Tribunal’s Stand

APTEL agreed with the industries, stressing that under law, an additional surcharge is allowed only if it is conclusively shown that capacity is stranded solely because of open access. It noted that RERC had ignored this basic test and failed to examine whether stranded power was really linked to open access.

Calling this a “grave error,” the tribunal set aside the order and told RERC to take a relook. "The case is remanded back to the Commission  with the direction to conduct a fresh hearing in order to ascertain as ..whether the stranded capacity of the distribution licensees arising out of their 
inability to schedule the power under the Power Purchase Agreement was solely on account of the open access consumers who have been procuring power from other sources."