Section 4(2) in Orissa Electricity Regulatory Commission (Determination of Open Access Charges) Regulations, 2006
(2)Surcharge - (i) Surcharge to be levied on open access customers under Section 42(2) of the Act, shall be determined by the Commission keeping in view the loss of cross-subsidy from these customers opting to take supply from a person other than the incumbent distribution licensee.(ii)Avoided cost method shall be used to determine the cost of supply of electricity to consumers of the applicable class.(iii)The methodology for computing such cost is as follows -(a)As a first step, the projected capacity that is likely to move away due to open access will be estimated.(b)Since, it will avoid purchase of power from marginal sources of supply, the weighted marginal cost of power purchase (fixed plus variable costs) from such sources would be considered as avoided cost of power purchase.(c)To that avoided cost, other charges viz, applicable transmission and wheeling charges will be added to arrive at the cost of supply.(iv)Cross-subsidy surcharge shall be computed by the licensee as the difference between (1) the tariff applicable to relevant category of consumers and (2) the cost of the distribution licensee to supply electricity to the consumers of the applicable class, and the same shall be submitted for necessary approval of the Commission.(v)The amount of such surcharge shall be utilised to meet the current level of cross-subsidy paid by the category of consumers applicable to electricity supply of open access customers and shall be paid to the distribution licensee of area of supply where the premises of the customer availing open access is located.(vi)The surcharge and cross-subsidy shall be progressively reduced and eliminated in the manner as the Commission may lay down for reduction and elimination of cross-subsidies in its regulations or revised tariff order issued from time to time keeping in view the Long-Term Tariff Strategy and the Business Plan approved by the Commission.(vii)Surcharge should be calculated by the licensees and approved by the Commission.
