The Gujarat Electricity Regulatory Commission (GERC) has rejected requests from renewable energy developers to replace the existing banking charge of ₹1.50 per unit with an in-kind levy of 8 per cent of the energy banked, saying the issue will be considered as part of a separate exercise to finalise a new banking charge framework.
Renewable energy stakeholders had argued that the flat ₹1.50-per-unit charge does not reflect the actual cost incurred by distribution companies and makes green energy projects financially unviable. They urged the Commission to adopt the Forum of Regulators’ (FoR) model recommendation of levying banking charges at 8 per cent of the banked energy, saying the mechanism is more equitable, transparent and automatically adjusts with electricity tariffs.
The stakeholders also contended that the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 envisage a common methodology for banking charges and that GERC had departed from the FoR’s recommendation without recording detailed reasons. They argued that, in the absence of a final State framework, the FoR’s model regulations should be followed.
Rejecting the plea, the Commission said the FoR’s model regulations are only recommendatory and that State electricity regulators retain the statutory discretion to determine banking charges based on state-specific network conditions, power procurement structures and policy considerations. It noted that a draft Sixth Amendment to the Green Energy Open Access Regulations, setting out a methodology for determining banking charges, has already been issued for public consultation.
Pending completion of that exercise, GERC has extended the existing banking charge of ₹1.50 per unit until August 31, 2026, or until a revised framework is notified, whichever is earlier.
The order has implications beyond Gujarat. Several States have adopted, or are considering, the Forum of Regulators’ recommendation of levying banking charges as 8 per cent of the energy banked instead of a fixed monetary charge. By reiterating that the FoR’s model regulations are only recommendatory and that State regulators are free to frame their own methodologies, GERC has reinforced the autonomy of State electricity commissions. For renewable energy developers and open access consumers, however, the decision means continued uncertainty over banking charges until the Commission finalises its own methodology.