HERC Increases Additional Surcharge to ₹1.37/kWh for Open Access Consumers in Haryana

PANCHKULA, Haryana – May 5, 2026

The Haryana Electricity Regulatory Commission (HERC) has authorized a 13% increase in the Additional Surcharge to ₹1.37/kWh, enabling state distribution licensees (DISCOMs) to recover ₹20.79 crore in stranded fixed costs for the second half (H2) of FY 2025-26.

Core Surcharge Specifications

The revised surcharge applies to the service areas of Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN). The financial recovery is based on a total calculated stranded cost of ₹207.9 million (₹20.79 crore).

Regulatory Rationale and Legal Basis

The Commission’s order is based on the statutory obligation of DISCOMs to maintain financial viability while fulfilling supply requirements.

• Recovery of Stranded Fixed Costs: The surcharge is designed to compensate DISCOMs for “stranded fixed costs” under long-term Power Purchase Agreements (PPAs). These costs are incurred when the capacity contracted for specific consumers remains unutilized due to their shift to alternative power sources.
• Universal Service Obligation: Under Section 43 of the Electricity Act, 2003, DISCOMs must maintain adequate capacity to provide a continuous power supply to all consumers. This necessitates long-term financial commitments to generators that must be paid regardless of whether the power is consumed.
• Revenue Gap Context: Regulatory filings indicate that DISCOMs currently recover only approximately 83% of their total fixed Operation and Maintenance (O&M) costs through existing fixed charges. This creates a deficit that the Additional Surcharge helps mitigate to prevent the financial burden from shifting to non-Open Access consumers.
• Legal Precedent: The Commission cited the Supreme Court of India ruling in MSEDCL v. JSW Steel Limited, which affirmed that the Additional Surcharge is compensatory in nature and specifically intended to meet the fixed cost obligations of the distribution licensee arising from its obligation to supply.

Calculation Methodology and Data Analysis

The Commission derived the ₹1.37/kWh rate using actual operational data and a standardized regulatory formula to ensure only costs specifically attributable to Open Access migration were recovered.

• Data Period: The calculation utilized actual backing down, Day-Ahead Market (DAM) purchase, and Open Access consumption data from the period of October 2024 to March 2025.
• Conservative Computation Approach: To isolate stranded power, the Commission performed a time-slot based analysis. Admissible stranded power was determined by taking the lower of Open Access consumption and backed-down power, net of any power purchased via the Day-Ahead Market.
• Technical Energy Volumes:
  • Admissible Stranded Energy: 144.70 million units (MUs).
  • Projected Open Access Consumption: 152.26 million units (MUs).
• Approved Fixed Cost: The Commission applied an average fixed cost of ₹1.44/kWh, as established in the approved tariff order for the 2025-26 financial year.

Applicability and Exemptions

The implementation of this order follows specific regulatory boundaries:

• Mandatory Applicability: The levy is applicable to all consumers procuring electricity through Open Access from any source other than the state distribution licensees (UHBVN and DHBVN).
• Captive Power Exemptions: In accordance with prevailing regulations, consumers who generate and consume electricity for their own use via captive power plants remain exempt from the Additional Surcharge.
• Effective Period: The revised rate became effective on April 30, 2026. This surcharge will remain in force until the Commission issues a subsequent revision order based on the next six-monthly data review.