Open Access Under the Lens: Karnataka’s Additional Surcharge Slides to a Lower Number But the Idea Holds
The core issue: Who pays for stranded capacity when big users move to Open Access?
The Karnataka Electricity Regulatory Commission (KERC) has rescheduled the hearing on Additional Surcharge for Open Access consumers to 2:00 pm, December 2, 2025, and extended the deadline for objections to 5:00 pm, December 1, 2025.
This update is procedural, not substantive the commission hasn’t disclosed BESCOM’s cost model, rate computation, or legal backing. But the underlying question remains unchanged: who bears the cost of stranded capacity when large industrial users shift to third-party power supply?
Inside BESCOM’s Argument
When industries switch to Open Access, BESCOM’s power sales drop, but its long-term power purchase agreements (PPAs) and the fixed capacity charges that come with them stay put.
BESCOM’s case is that these under-utilised PPAs create stranded fixed costs, which must be recovered from the consumers who caused them i.e., Open Access users.
Originally, BESCOM proposed an Additional Surcharge of ₹1.65 per kWh. After recalculations and updated energy/sales projections, the figure fell to ₹0.58 per kWh.
This reduction reflects a narrower attribution of stranded costs to Open Access migration rather than an overall policy retreat. The principle of recovery stays intact.
Why ₹0.58/kWh Still Matters
Even a smaller surcharge can hit hard in an industrial ecosystem like Karnataka’s.
The state’s cross-subsidy structure and recent tariff adjustments make every additional rupee count for industries running on tight margins.
For tech parks, process industries, and captive users, the landed cost of power determines competitiveness. Even ₹0.58 per unit can reshape Open Access viability, banking strategies, and power scheduling.
No surprise industry bodies are gearing up to formally object.
What to Watch in the December 2 Hearing
Causality & Measurability Does BESCOM’s model directly link stranded capacity to Open Access withdrawals, or does it mask broader revenue gaps?
Double-Recovery Risks Are these fixed costs already recovered in ARR/tariffs? How will KERC ensure Open Access users aren’t charged twice?
Revised Arithmetic The drop from ₹1.65 to ₹0.58 raises questions. Stakeholders will seek detailed workings, assumptions, and PPA-wise backing-down data.
Temporal Ring-Fencing For what period is the surcharge applicable, and how often will it be trued-up as Open Access volumes fluctuate?
Interaction with Other Adders How does this surcharge sit alongside other levies like the Pension & Gratuity Add-on? Clarity here matters for transparency and billing accuracy.
Timeline & Participation
Objections/comments: Up to 5:00 pm, December 1, 2025
Public hearing: 2:00 pm, December 2, 2025 (Virtual Mode)
Impact on Large Consumers
Even at ₹0.58/kWh, the surcharge can narrow Open Access arbitrage margins and shift industry behavior:
More on-site or captive generation
Shorter OA contracts to hedge risk
Optimised load management during peak blocks
If upheld, this rate could alter Open Access economics across Karnataka’s industrial clusters.
Bottom Line
The procedural change might look minor, but the principle at stake is major — how should the grid recover fixed costs when consumers increasingly go self-supply or third-party route?
As KERC reconvenes on December 2, expect this hearing to become a reference point for how India’s regulators interpret Section 42(4) and balance utility recovery vs consumer choice.
Originally reported for EnergyLineIndia.com Written by: [Jaya]
For more
1) RTM ended the week at its priciest on 2025-11-10 •RTM MCP printed the weekly high at Rs 3.39/kWh on 2025-11-10, with cleared volume ~146.
