Telangana’s Open Access Policy: Emerging Opportunities

Introduction

The open access regime in India has gained significant traction over the past few years, particularly in the renewable energy sector, as industries and commercial consumers explore alternatives to reduce power costs and meet sustainability goals. Telangana, a state with substantial industrial demand and growing renewable potential, has made considerable strides with the TSERC (Terms and Conditions of Open Access Policy) Regulations, 2024. As of July 1, 2025, important developments have reshaped the open access landscape, offering both opportunities and challenges for businesses aiming to harness the benefits of this regulatory framework.

Regulatory Framework: TSERC Open Access Policy, 2024

The Telangana State Electricity Regulatory Commission (TSERC) notified its comprehensive Open Access Regulations, 2024, designed to simplify eligibility and enable wider participation in green energy procurement:

• Eligibility Threshold: Consumers with a contracted demand of ≥100 kW (including aggregate demand across multiple connections within the same DISCOM area) are eligible for green open access.
• Access Models: The regulations cover third-party procurement, captive, and group captive consumption, thereby allowing flexible sourcing options for businesses.
• Banking Facility: Monthly energy banking is permitted up to 30% of consumption, with carry-forward and drawal mechanisms subject to specified surcharges and terms.
• Access Tenure: Open access can be availed short-term (less than 1 month), medium-term (1–5 years), or long-term (up to 25 years), allowing businesses to plan long-term energy strategies.
• Charges: Applicable charges include transmission, wheeling, and surcharges as per TSERC’s annual tariff orders.
• The regulatory design supports the broader objective of energy transition and decarbonization, with a strong emphasis on ease of doing business and cost predictability.

Opportunities Under the Policy

Several promising opportunities have emerged for consumers under Telangana’s open access framework:

• Cost Optimization: Open access allows consumers to source electricity at competitive rates, especially from renewable generators. For many commercial and industrial users, this can result in substantial savings compared to traditional DISCOM tariffs.
• ESG Compliance and Green Credentials: With sustainability and environmental disclosure becoming central to corporate reporting, open access to renewable energy offers a tangible path to reduce carbon footprints and meet ESG mandates.
• Market Entry for Smaller Consumers: By setting the eligibility bar at 100 kW, the policy allows even mid-sized manufacturing units, IT parks, and commercial entities to participate. Earlier, such benefits were often limited to large industries.
• Banking & Flexibility: The monthly banking provisions allow consumers to align power usage with production cycles, improving both financial viability and grid stability.

July 1, 2025, Updates: TSERC Tariff Orders & Additional Surcharge

As part of its mid-year regulatory housekeeping, TSERC released tariff orders applicable for FY 2025–26, introducing revised charges that directly affect open access users:

A. Additional Surcharge for H1 FY 2025–26

• TSERC, in its April 2025 tariff order, notified a new Additional Surcharge applicable to consumers availing open access during April 1 to September 30, 2025.
• Though the precise surcharge rate for H1 FY26 has not been disclosed publicly, prior surcharges ranged between ₹1.09/kWh to ₹1.40/kWh in FY 2024–25.
• Businesses intending to opt for open access in Telangana must factor this surcharge into their landed cost calculations.

B. Wheeling and Transmission Charges

• The FY 2025–26 tariff order (Order Nos. 1–4) also revises transmission tariffs for TSTRANSCO and wheeling charges by DISCOMs.
• These updates are essential to determine the final cost of energy delivered through the open access route.

C. No Change in Banking or Load Norms

The Open Access Regulations, 2024 continue to govern eligibility and banking rules. There has been no change in load threshold (100 kW) or in banking limits (30% monthly).

Legal and Strategic Implications for Businesses

With open access becoming a strategic energy procurement option, the following considerations become paramount:

• Contractual Structuring: Businesses must carefully draft Power Purchase Agreements (PPAs) to reflect the updated surcharge regimes and ensure termination clauses account for regulatory changes.
• Regulatory Watch: Since surcharges and transmission/wheeling charges are revised semi-annually, companies should track TSERC orders regularly to evaluate project feasibility.
• Land and Infrastructure: For captive or group captive models, land acquisition and transmission connectivity must be vetted from a legal and technical standpoint.
• Dispute Management: Many open access projects have encountered delays in approvals and energy crediting. Proactive legal advisory can mitigate such risks through stakeholder engagement and early filings.

Conclusion

Telangana’s open access regime, especially following the 2024 regulation and 2025 surcharge updates, offers a robust foundation for greening industrial electricity consumption while driving down costs. However, to unlock these benefits, consumers must take a comprehensive and legally compliant approach—from evaluating eligibility and tariffs to executing bulletproof contracts.

At King Stubb & Kasiva, we regularly advise clients on regulatory compliance, energy procurement structures, and dispute resolution in the open access and renewable energy domain. Should your organization be exploring open access opportunities in Telangana or other Indian states, our dedicated Energy & Infrastructure team would be pleased to assist.