By S&S Co. Advocates & Solicitors · Published 24 September 2026 · Informational content, not legal advice — see our disclaimer
What Open Access Lets a Consumer Do
Open access allows an eligible consumer to procure electricity directly from a generator, or through a trader or power exchange, instead of — or alongside — its local area distribution licensee, using the licensee's or a common carrier's wires on payment of prescribed charges. This right is grounded in Section 42 of the Electricity Act, 2003, and is the mechanism that allows a large consumer to shop for power outside its default discom relationship.
A Lower Threshold for Green Power
Under the Green Energy Open Access Rules, the eligibility threshold for open access specifically for green or renewable power has been reduced to 100 kW — a significant drop from the general 1 MW threshold that applies to conventional (non-green) open access. This change opens the open-access route to considerably smaller commercial and industrial consumers than would otherwise qualify, provided the power being procured is genuinely renewable.
The Charge Stack
For third-party open access — buying power from an unrelated generator — the typical charge stack includes transmission and wheeling charges, cross-subsidy surcharge (CSS), additional surcharge (AS), and banking or standby charges, each determined by the relevant State Electricity Regulatory Commission. Cross-subsidy surcharge, mandated under Section 42(2) of the Electricity Act, exists to compensate the discom for the subsidy revenue it loses when a high-tariff consumer moves off its network onto open access.
The Green Energy Open Access Rules specifically cap increases in cross-subsidy surcharge and remove the additional surcharge altogether for green power, as a deliberate incentive for renewable procurement over conventional third-party open access.
Captive Structures Cost Less
A 'captive' structure — where the consumer or consumers hold at least 26% equity in the generating plant and consume at least 51% of its output — is treated more favourably still: captive open access is exempt from both the cross-subsidy surcharge and the additional surcharge, making it materially cheaper than ordinary third-party open access. This is a separate route from the green-power concessions described above, and the two can in principle be combined where a captive plant is also a renewable generator.
Because State Electricity Regulatory Commissions set and periodically revise wheeling charges and surcharges for their own state, the actual landed cost of open-access power varies significantly by location and should be checked against the current state regulations before committing to a switch, rather than assumed from figures applicable elsewhere.
Frequently Asked Questions
What is the eligibility threshold for open access to buy green/renewable power?
100 kW, under the Green Energy Open Access Rules — a substantial reduction from the general 1 MW threshold that applies to conventional (non-green) open access.
What charges apply to third-party open access power procurement?
Transmission and wheeling charges, cross-subsidy surcharge, additional surcharge, and banking or standby charges, all set by the relevant State Electricity Regulatory Commission.
Why is captive open access cheaper than third-party open access?
A captive structure — at least 26% equity ownership and 51% consumption of the plant's output — is exempt from both the cross-subsidy surcharge and the additional surcharge, unlike ordinary third-party open access.
Do open-access charges vary by state?
Yes. Wheeling charges and surcharges are set and periodically revised by each State Electricity Regulatory Commission, so the actual cost of open-access power differs significantly by state.
References & Further Reading
This article references the following statutory provisions. Readers should always verify current rules, fees and timelines against the applicable statute and rules as amended, since these are revised from time to time.
- Electricity Act, 2003, Section 42.
- Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022, as amended.
- Electricity Rules, 2005, for the captive generating plant definition and its surcharge exemptions.