GERC Sets ₹1/kWh Additional Surcharge for Open Access

GERC Sets ₹1/kWh Additional Surcharge for Open Access

September 26, 2025

The Gujarat Electricity Regulatory Commission (GERC) has revised the additional surcharge applicable to open-access electricity consumers in the state, raising it to ₹1.00 per kilowatt-hour (kWh) for the period October 1, 2025 to March 31, 2026. This marks an increase of ₹0.18/kWh compared to the previous six-month period from April 1 to September 30, 2025, when the surcharge stood at ₹0.82/kWh.

Who Does This Affect?

The revised surcharge applies to consumers of four state-owned distribution companies — Dakshin Gujarat Vij Company (DGVCL), Madhya Gujarat Vij Company (MGVCL), Paschim Gujarat Vij Company (PGVCL), and Uttar Gujarat Vij Company (UGVCL) — who source electricity through open access from any supplier other than their respective DISCOM.

In simple terms, if your business in Gujarat currently procures renewable energy through open access arrangements, this surcharge will be added to your per-unit cost of power for the next six months.

How Was the Surcharge Calculated?

GERC’s methodology, established through an order in August 2022, requires bi-annual review of the additional surcharge. The calculation is based on estimating the stranded fixed costs that DISCOMs incur when open-access consumers migrate away from traditional supply — net of demand charges already collected and transmission or distribution losses.

For the reference period of October 2024 to March 2025, GERC’s analysis found that the fixed-cost liabilities of DISCOMs stood at ₹76.65 billion. After accounting for stranded capacity, network costs, and past recoveries, the net recoverable amount was calculated at ₹1.49 billion. Dividing this by the total scheduled open-access energy consumed during the same period yielded the surcharge of ₹1.00/kWh.

What Does This Mean for Businesses?

While the surcharge increase of ₹0.18/kWh may seem incremental, it has real implications for high-consumption industrial and commercial consumers in Gujarat who rely on open access for cost savings. Businesses drawing significant power loads will need to reassess their per-unit landed cost calculations to ensure that open access continues to deliver net savings over DISCOM tariffs.

That said, even with this revised surcharge, open access renewable energy typically remains more economical than prevailing industrial grid tariffs in Gujarat — particularly when factoring in cross-subsidy surcharge (CSS) exemptions available under Group Captive structures.

What Happens Next?

GERC has committed to reviewing the surcharge every six months to maintain a balance between the interests of open-access buyers and the financial sustainability of state distribution utilities. The next revision is expected in April 2026.

Businesses operating in Gujarat are advised to work with their energy advisors to model the revised landed cost of their open access power and evaluate whether their current procurement structure remains optimal under the new surcharge rate.

For state-specific open access tariffs and policy updates, visit our Solar Tariffs and Policies pages.