GERC proposes Rs 1 per unit banking charge for green open access users

The Gujarat Electricity Regulatory Commission (GERC) has issued draft regulations proposing a banking charge of Rs 1.00 per unit for green energy open access consumers from September 1, 2026 to March 31, 2027. The draft regulations also introduce a methodology for determining banking charges annually from FY 2027-28 onwards based on operational and market data.

Interim rate proposed

The banking charge for renewable energy open access consumers has remained at Rs 1.50 per unit since the principal regulations were notified in February 2024. The rate has been extended through five amendments while GERC conducted a detailed study on the banking charge framework.

Based on the study and data submitted by distribution licensees, the Commission has calculated a banking charge of Rs 1.06 per unit. However, it has proposed a reduced rate of Rs 1.00 per unit, citing limitations related to data availability and the relatively small number of green energy open access consumers.

The proposed rate will apply from September 1, 2026 to March 31, 2027.

Annual determination from FY 2027-28

From FY 2027-28 onwards, banking charges will be determined annually using a methodology detailed in Annexure-I of the draft regulations.

The calculation will be based on actual 15-minute block-wise injection and consumption data, market prices, variable generation costs, transmission charges and applicable losses. Distribution licensees will be required to submit data for the immediately preceding calendar year through affidavits.

The Commission may also seek verification of the submitted data from the State Load Despatch Centre (SLDC).

Data submission requirements

The draft regulations introduce mandatory data submission requirements for distribution licensees.

All licensees will be required to maintain and submit complete and accurate data in the format and timeline prescribed by the Commission. The data must be supported by a sworn affidavit.

GERC has proposed a penalty mechanism for non-compliance. If a distribution licensee fails to provide complete and accurate data, the banking charge applicable to that licensee will be considered nil. To prevent any undue benefit, a deemed revenue of 1 paisa per unit per annum of total energy handled will be adjusted in the licensee’s Aggregate Revenue Requirement (ARR).

Floor and ceiling rates

To provide predictability for stakeholders, the Commission has proposed a floor banking charge of Rs 0.50 per unit and a ceiling of Rs 1.50 per unit.

These limits will apply only where complete data has been submitted. According to the Commission, the floor rate ensures recovery of inherent grid management costs, while the ceiling prevents banking charges from becoming excessively high and discouraging renewable energy adoption.

Common banking charges

The draft regulations allow GERC to determine common banking charges for state-owned distribution companies, including Dakshin Gujarat Vij Company Limited (DGVCL), Paschim Gujarat Vij Company Limited (PGVCL), Madhya Gujarat Vij Company Limited (MGVCL) and Uttar Gujarat Vij Company Limited (UGVCL), since power procurement is centrally managed through Gujarat Urja Vikas Nigam Limited (GUVNL).

The Commission may also determine common banking charges for private distribution licensees with common power procurement arrangements, such as Tata Power Ahmedabad and Tata Power Surat.

Distribution licensees serving Special Economic Zones (SEZs), Special Investment Regions (SIRs), ports and new licensed areas may also be aligned with the rates applicable to state-owned discoms.

Banking charge methodology

The proposed methodology calculates banking charges as the ratio of the aggregate net revenue impact on the distribution licensee to the total banked energy during a billing period of one calendar month.

The framework includes separate accounting of peak and off-peak banked energy, first-in-first-out (FIFO) accounting and a monthly banking period with no carry-forward of unused banked energy.

The regulations also propose a cap under which cumulative banked energy at any point cannot exceed 30% of the consumer’s total monthly energy consumption.

For each 15-minute time block, the methodology compares the Indian Energy Exchange (IEX) market clearing price with the variable cost of marginal thermal generation to determine the most economical treatment of surplus energy, including sale through the exchange, internal utilisation or routing through battery energy storage systems (BESS).

Stakeholder consultation

The Commission has invited suggestions, comments and objections from stakeholders by July 20, 2026. A hybrid public hearing has been scheduled for July 21, 2026.

If implemented, the regulations will replace the interim banking charge framework with a structured, data-driven mechanism for determining banking charges for green energy open access consumers in Gujarat.

The featured photograph is for representation only.