Open access charges under a utility-scale renewable project vary with location and procurement models. It is worth noting that renewable power plants under a captive or group captive model are generally exempted from many of these charges, varying by state. Various charges under the Open Access mechanism include the following:
Transmission charges - The transmission charges are payable to the transmission company for using the transmission infrastructure.
Wheeling charges - The wheeling charges are payable to the distribution company for using the distribution network. They are applicable to all power generating plants connected to the distribution grid at 33 kV or below and using Open Access.
Transmission losses - These are the electricity losses in the transmission line between the point of generation and the point of consumption. Typically, these are in the range of 2% to 6%.
Wheeling losses - These are the electricity losses incurred by the distribution network. They are determined by the State Electricity Regulatory Commissions (SERCs) for each buyer category and typically range between 4% and 10%.
Cross-subsidy surcharge (CSS) - These are payable by commercial and industrial buyers to fund the tariff subsidy for agricultural and residential buyers. When a buyer opts for Open Access, the distribution company loses high-value income that would have subsidized low-income electricity users. CSS is designed to compensate for the lost subsidy.
Additional surcharge (AS) - AS is imposed to recover the cost of standard assets when corporate buyers leave the distribution company and procure power through Open Access. The utility needs to prove to the regulator that assets are stranded to impose AS.
Banking charges - Banking of power is when a developer can literally “store” the power generated by the utility if the buyer is unable to use the power at the time of generation. Methods of such electricity accounting vary from state to state, but broadly, it is either done on time-block basis (15 minutes to few hours or peak and non-peak hours) or on gross monthly basis. The state regulators set banking regulations allowing utilities to charge the generator for the banking facility and define periods during which the banked power may be withdrawn.