CERC Orders Refund of ₹711.44 Crore to Haryana Discoms in Transmission Charges Dispute; Recognises Entitlement to Interest

In an order dated 28.02.2026, the Central Electricity Regulatory Commission (CERC), on remand, has ruled in favour of the Haryana Discoms (UHBVNL and DHBVNL, through HPPC), directing refund of ₹711.44 crore along with applicable interest, in relation to transmission charges wrongly levied by Grid India.

This order marks the culmination of prolonged litigation spanning multiple rounds before the Appellate Tribunal for Electricity (APTEL) and the CERC, concerning the classification and charging of the 400 kV IGSTPS–Daulatabad transmission line.

1. Recognition of Intra-State Nature of Transmission Line

At the core of the dispute was whether the 400 kV transmission line from Indira Gandhi Super Thermal Power Station (IGSTPS) to Daulatabad constituted an   transmission system (ISTS) or an intra-state line.

Reaffirming its earlier findings, the CERC held that the line is an intra-state transmission line and therefore not subject to ISTS charges under the PoC (Point of Connection) mechanism.

This classification formed the legal basis for holding that the levy of interstate transmission charges on Haryana Discoms was not sustainable.

2. Refund Limited to Period Within Limitation

Following remand by APTEL, the CERC confined the relief to the legally permissible period from 03.06.2014 to 04.05.2018, in line with the application of limitation principles to adjudicatory proceedings.

The Tribunal had clarified that claims prior to June 2014 were time-barred, while claims within the three-year window were maintainable.

3. Quantification of Refund and Inclusion of April 2018

A key issue before the Commission was the computation of the refund amount.

• The parties reconciled a principal sum of ₹691.34 crore for June 2014 to March 2018
• The Petitioners claimed an additional amount for April 2018

Rejecting CTUIL’s objection, the CERC held that the Petitioners were entitled to refund for April 2018 as well, bringing the total principal refund to ₹711.44 crore.

The Commission specifically noted that billing for April 2018 continued to include LTA quantum attributable to Haryana’s share, thereby warranting refund.

4. Directions for Recovery and Adjustment Mechanism

The CERC permitted phased recovery of the refund amount by the Petitioners:

• ₹483.50 crore (already allowed earlier in instalments)
• ₹207.84 crore (balance recovery in further instalments)
• Additional ₹20.10 crore (pertaining to April 2018)

These recoveries are to be adjusted through charges collected under the applicable Sharing Regulations.

5. Entitlement to Interest and Restitution

In line with APTEL’s directions, the CERC recognised that the Petitioners are entitled to interest/carrying cost as a measure of restitution for amounts illegally recovered.

The Commission is required to determine:

• Whether interest should be simple or compound
• The applicable rate of interest
• The methodology of computation (including rests, if compound)

This stems from APTEL’s finding that recovery of ISTS charges on an intra-State line was unlawful, thereby triggering restitutionary principles.

6. Consumer Adjustment Through Tariff Mechanism

The Commission recorded that the Haryana Discoms had passed on these charges to consumers.

Accordingly, any refund (principal and interest) is required to be adjusted in future tariff determination, ensuring that the ultimate benefit flows to end consumers.

Judgement Link

APTEL rules on Section 79(1)(f) of the Electricity Act, 2003: No Automatic Reference to Arbitration in Composite PPA Disputes

In a landmark judgment dated 25.02.2026, the Appellate Tribunal for Electricity (Appellate Tribunal) has ruled in favour of the Punjab State Power Corporation Limited (PSPCL) and the Haryana Discoms (UHBVNL and DHBVNL, through HPPC), setting aside the order passed by the Central Electricity Regulatory Commission (CERC).

The CERC, in its common order dated 19.11.2025, had directed that the disputes between the procurers and Tata Power Company Limited (TPCL) regarding the short-supply of contracted electricity be mandatorily resolved through arbitration. By allowing Appeal Nos. 371 and 400 of 2025 filed by the Haryana Utilities and PSPCL respectively, the Appellate Tribunal has reaffirmed the exclusive adjudicatory jurisdiction of the Regulatory Commissions over matters impacting public interest and tariff. 

1. Impermissibility of Splitting Causes of Action

One of the central issues in the appeals filed by PSPCL and HPPC was the CERC’s erroneous decision to bifurcate their petitions. Both utilities had sought compensation jointly and severally against TPCL and the Western Regional Load Despatch Centre (WRLDC), a statutory body. PSPCL and HPPC’s grievance was that while TPCL illegally ceased generating and supplying their contracted capacities (475 MW for PSPCL and 380 MW for HPPC), WRLDC failed in its statutory duty under Section 28 of the Electricity Act to ensure proportionate scheduling.

The CERC had attempted to refer the dispute against TPCL to arbitration, while leaving the procurers to file separate petitions against WRLDC.

Relying on the Supreme Court’s rulings in Sukanya Holdings and Vidya Drolia, the Appellate Tribunal held that Section 8 of the Arbitration & Conciliation Act, 1996 does not permit the bifurcation of a cause of action or the splitting of a suit between parties to an arbitration agreement (TPCL) and non-parties (WRLDC). Because WRLDC discharges statutory functions making disputes against it non-arbitrable, and since the monetary claims were joint and several against TPCL and WRLDC. 

2. Strict Compliance with Section 8 of the Arbitration & Conciliation Act, 1996

The Appellate Tribunal also ruled on the procedural mandates of the Arbitration & Conciliation Act, 1996 (the “1996 Act”). The Appellate Tribunal held that the provisions of Section 8(1) of the 1996 Act apply strictly to proceedings before the CERC.

Under Section 8(1), a party seeking to invoke arbitration must apply not later than the date of submitting its first statement on the substance of the dispute. In the present batch of cases, TPCL completely failed to make such an application before filing its reply to the petitions instituted by PSPCL and HPPC. Furthermore, TPCL had even filed its own independent petition before the CERC. The Appellate Tribunal held that non-compliance with the mandatory timeline under Section 8(1) vitiated the CERC’s decision to refer the dispute to arbitration.

3. CERC cannot refer a dispute to Arbitration if it lacks Adjudicatory Jurisdiction

The CERC had held that because the disputes were “non-tariff” contractual breaches, it lacked the jurisdiction to adjudicate them, and was therefore “bound” to refer them to arbitration under the second limb of Section 79(1)(f) of the Electricity Act.

The Appellate Tribunal rejected the CERC’s view that it could refer disputes to arbitration merely because it lacked jurisdiction to adjudicate them holding that the power to refer a dispute to arbitration is not independent of the power to adjudicate. Reaffirming the Hon’ble Supreme Court’s jurisprudence in GUVNL v. Essar, APTEL noted that the word “and” in Section 79(1)(f) must be read as “or”. This grants the CERC the discretion to eitheradjudicate a dispute or refer it to arbitration.

The Appellate Tribunal established that the CERC can only refer those disputes to arbitration which it is legally empowered to adjudicate under clauses (a) to (d) of Section 79(1). If the CERC lacks inherent jurisdiction to adjudicate a dispute, it simultaneously lacks the jurisdiction to refer that very dispute to arbitration.

4. Tariff and Regulatory Disputes are Non-Arbitrable

The Appellate Tribunal reiterated that the Electricity Act is a special enactment designed to protect public interest and consumers. Any dispute that concerns the regulatory functions of the Commission, or impacts the tariff of a generating company (either directly or indirectly), must be exclusively adjudicated by the Regulatory Commissions and cannot be relegated to a private Arbitral Tribunal.

By setting aside the CERC’s order dated 19.11.2025, the Appellate Tribunal has restored all petitions to CERC. The CERC is now directed to examine whether the subject matter of the disputes falls within the ambit of Section 79(1)(b) of the Electricity Act. If the disputes impact tariff or touch upon regulatory functions, the CERC is mandated to adjudicate them itself.

The judgment highlights the statutory limits on arbitral reference under Section 79(1)(f) of the Electricity Act, 2003 and clarifies the interface between the Arbitration and Conciliation Act, 1996 and the Electricity Act, 2003, reinforcing the primacy of regulatory adjudication in statutory disputes.

Judgment Link

APTEL Reaffirms Statutory Primacy: Relinquishment Charges Upheld Despite Force Majeure

The dispute centred around the grant of Long-Term Access (‘LTA’) and the execution of a Bulk Power Transmission Agreement (‘BPTA’) between Aryan Renewable Energy Private Limited (‘Aryan Renewable’) and Central Transmission Utility (‘CTU’) for evacuation of power from Aryan Renewable’s proposed 1200 MW thermal power project at Amelia, Madhya Pradesh.

Background

Aryan Renewable proposed to set up a 1200 MW thermal power project in Madhya Pradesh and was granted LTA for the evacuation of power through the inter-State transmission system. Pursuant to the grant of LTA, a BPTA was executed, and the Appellant furnished a bank guarantee towards its transmission obligations.

Subsequently, the Central Water Commission declined to grant the No-Objection Certificate for water drawal, rendering the project non-implementable. Aryan Renewable contended that this constituted a force majeure event and that no unit of the generating station ever achieved commercial operation.

Thereafter, the bank guarantee submitted by Aryan Renewable were invoked, and the Central Electricity Regulation Commission (‘CERC’), vide the Impugned Order, held that Aryan Renewable remained liable to pay transmission and relinquishment charges under Regulation 18 of the Connectivity Regulations, 2009. Aggrieved, Aryan Renewable preferred an Appeal before the Hon’ble Appellate Tribunal.

Issues Framed by the Hon’ble Appellate Tribunal

1. Whether Regulation 18 of the Connectivity Regulations, 2009 applies to a “zero-day failure” case, where LTA was never availed due to Force Majeure?
2. Whether binding precedent by this Hon’ble Tribunal exists on the above
3. Whether independently of precedent, the text of Regulation 18 contains a casus omissus regarding zero-use scenarios due to force majeure events, which is governed exclusively by the BPTA
4. Whether Force Majeure under the BPTA overrides the statutory obligation to pay relinquishment charges under Regulation 18?

Analysis

Issue 1: Applicability of Regulation 18 to “zero-day failure” 

1(a): Whether binding precedent exists

Aryan Renewable’s case primarily rests on Brahmani Thermal Power Private Limited v. CERC & Ors. passed by the Appellate Tribunal [Judgement dated 20.03.2025], where Regulation 18 was interpreted as—

(i) it applies solely to voluntary relinquishment of LTA “out of its wish”, having “no application” to compulsory exits due to unforeseeable force majeure events beyond control; 

(ii) it presupposes actual stranded transmission capacity from such relinquishment, which is absent if lines are not commissioned or are utilised by others; and 

(iii) LTA granted to generators activates only post-commercial operation, so no transmission charges liability arises where force majeure prevents project establishment altogether.

Aryan Renewable also relied on PEL Power Ltd. v. CERC and Himachal Sorang Power Pvt. Ltd. v. CERC, arguing that these decisions collectively constitute binding precedent excluding ‘zero-use’ cases from the scope of Regulation 18. The Hon’ble Appellate Tribunal rejected this submission. It noted that the judgments relied upon did not consider the full statutory framework of the Connectivity Regulations, 2009, particularly the interrelationship between Regulations 14, 15 and 18. The Hon’ble Appellate Tribunal held that the Brahmanijudgment impermissibly read additional words into Regulation 18 by restricting its application to voluntary relinquishment alone, contrary to settled principles of statutory interpretation. The Hon’ble Appellate Tribunal reiterated that a judgment is binding only for what it actually decides, and observations made without consideration of relevant statutory provisions do not qualify. 

1(b): Whether the text of Regulation 18 contains a casus omissus

Independently, Aryan Renewable contended that Regulation 18 uses the phrase “have availed access rights” in both its categories, implying the provision applies only where access has been operationalised, and that a zero-use case therefore, falls outside its scope as a casus omissus.

The Hon’ble Appellate Tribunal rejected this contention. Through a harmonised reading of the definitions of ‘LTA’ and “long-term customer” under the Connectivity Regulations, 2009, the Hon’ble Appellate Tribunal held that the right to use the inter-State transmission system is conferred upon grant of LTA by the CTU, which is thereafter formalised through execution of the BPTA under Regulation 15. Regulation 14 was construed to distinguish between the grant of access and the date from which such access becomes operational.

The Hon’ble Appellate Tribunal held that where access is relinquished after grant but before commissioning, the period of utilisation is necessarily zero years, which squarely falls within Regulation 18(1)(b), applicable to customers who have not availed access rights for at least twelve years. Consequently, the zero-day failure scenario is not an omitted case under the Regulations, and the plea of casus omissus was found to be without merit.

2. Whether Force Majeure under the BPTA overrides the statutory obligation to pay relinquishment charges under Regulation 18

Aryan Renewable argued that Clause of the BPTA dealing with force majeure operates as an overriding provision absolving it from all liabilities, including relinquishment charges. TheHon’ble Appellate Tribunal rejected this submission by emphasising the primacy of statutory regulations over contractual arrangements.

The Hon’ble Appellate Tribunal relied on the Constitution Bench decision of the Hon’ble Supreme Court in PTC India Ltd. v. CERC to reiterate that regulations framed under Section 178 of the Electricity Act, 2003, have the force of subordinate legislation and override contractual provisions.

The Hon’ble Appellate Tribunal further held that Clause of the BPTA merely exempts parties from claims for loss or damage arising from force majeure and does not extend to statutory transmission or relinquishment charges, which form part of a pooled, non-discriminatory transmission framework. Transmission charges are not payable to CTU alone but are shared among Designated ISTS Customers under the Sharing Regulations, and therefore cannot be characterised as contractual damages.

In the absence of a force majeure exception in Regulation 18 itself, and given the statutory treatment of the Connectivity Regulations, the Hon’ble Appellate Tribunal concluded that Clauses of the BPTA cannot override the obligation to pay relinquishment charges under Regulation 18(1)(b). The appeal was therefore, dismissed as being devoid of merit.

Conclusion

The Hon’ble Appellate Tribunal judgment placed an emphasis on the statutory nature of the Connectivity Regulations 2009, making it clear that they were not to be superseded by the BPTA, and that there was no cassus omissus in Regulation 18 underlining the importance of construing the same in a harmonious matter.

Judgment Link

Sanctity Of The Bidding Documents And The Tariff Incorporated In The Ppa In Cases Where Accelerated Depreciation Has Been Availed By The Generator

The dispute revolves around the nature of depreciation availed by Mokia Green Energy Pvt. Ltd. (“Appellant”) and its consequent impact on tariff charged as per the Power Purchase Agreement (“PPA”) which was executed following a Request for Proposal (“RfP”) and Competitive Bidding Process. The Hon’ble Appellate Tribunal vide its Judgement dated 08.01.2026 in Appeal 323 of 2025 has dismissed the appeal filed by the Appellant and held that tariff has to necessarily be reduced on availment of Accelerated Depreciation. 

Background

In 2013, a RfP was issued by Punjab Electricity Development Agency (“PEDA”) where it was stipulated that if at any stage it is found that project availing normal rate of depreciation is claiming Accelerated Depreciation, then tariff would be revised as per the Punjab State Electricity Regulation Commission (“PSERC”) tariff applicable for Accelerated Depreciation, with effect from the date of commissioning.

The Appellant was one of the successful bidders and had declared that it will avail for normal rate of depreciation. Consequently, the Appellant and Punjab State Power Corporation Ltd. (“PSPCL”) entered into a PPA. However, later it was discovered that the Appellant was availing Accelerated Depreciation and, consequently PSPCL issued a notice of demand for reducing the applicable tariff. The Appellant had furnished a specific undertaking before signing the PPA that the Appellant will not avail Accelerated Depreciation.

Issues Framed by the Hon’ble Appellate Tribunal

1. Whether the rate of depreciation, i.e. 80% claimed by the Appellant constitutes as Accelerated Depreciation?
2. Assuming the Appellant had claimed accelerated depreciation, whether PSPCL can revise the tariff in the absence of a specific provision in the PPA? 
3. Whether PSPCL can direct the Appellant to pass on or refund any amount in the absence of any financial benefit having accrued to it?

Analysis

Issue 1: Accelerated Depreciation

The Hon’ble Appellate Tribunal examined the scheme of Section 32 of the Income Tax Act, 1961 (“IT Act”) and noted that it provides two alternative depreciation regimes. Depreciation under Section 32(1)(i), read with Appendix IA and Rule 5(1A) of the Income-tax Rules, 1962 (“IT Rules”), applies the straight-line method and prescribes a rate of 7.69% for solar power generating systems. In contrast, depreciation under Section 32(1)(ii), read with Appendix I and Rule 5(1) of the IT Rules, follows the written down value method and permits a substantially higher rate of depreciation of 80%/40%.

The Hon’ble Appellate Tribunal held that the depreciation regime yielding higher depreciation in the initial years necessarily constitutes “accelerated depreciation”, and the absence of the express term in Section 32(1)(ii) does not alter its substantive character. Since the Appellant admittedly claimed depreciation under Section 32(1)(ii) at the rate of 80%/40%, it was rightly held to have availed accelerated depreciation.

Issue 2: Entire Agreement Clause in the PPA

In so far as arguments of the Appellant concerning “entire agreement” clause in the PPA, theHon’ble Appellate Tribunal emphasised that tariff is not a standalone numerical figure and cannot be read in isolation. It is inextricably linked to the competitive bidding process conducted pursuant to the RfP, and is therefore inherently subject to the terms and conditions stipulated therein.

The Hon’ble Appellate Tribunal noted that the Preamble to the PPA expressly recognises the Implementation Agreement (“IA”), which unequivocally binds the Company to act in accordance with the terms of the RfP. In light of this contractual framework, it was held that the IA forms an inseparable part of the PPA, thereby binding the Appellant to the conditions of the RfP notwithstanding the presence of an “entire agreement” clause.

The Hon’ble Appellate Tribunal further rejected the Appellant’s contention that the Undertaking, whereby it committed to avail only normal depreciation, ought to be read down in the event of inconsistency with the PPA. It was held that such an undertaking cannot be rendered redundant merely because the consequences of its breach were not expressly restated in the PPA. In the event of such a lacuna, the consequences must necessarily be imported from the bidding documents, which constitute the foundation of the contractual relationship.

Issue 3: Benefit Accrued on account of Accelerated Depreciation

The Appellant contended that even if it were held to have availed accelerated depreciation, no benefit was required to be passed on since it was a loss-making entity and had derived no actual financial gain. This contention was rejected on the ground that the accrual of benefit was immaterial. The RfP and the tariff determined by PSERC expressly provided for differential tariffs depending on whether accelerated depreciation was availed, irrespective of the generator’s profitability. Consequently, the tariff was required to be revised in accordance with the RfP, and the question of whether the Appellant had actually benefited from accelerated depreciation was held to be irrelevant.

Conclusion

The Hon’ble Appellate Tribunal’s judgment underscores that generators are bound by their undertakings. It further reiterates the need for harmonious construction of contractual documents and affirms that tariff revision will follow in case the generators resile on their commitment to avail normal depreciation, independent of any actual benefit accrued by the generator.

Judgement Link

Hon’ble Supreme Court Upholds APTEL’s Restitution Findings In The Vemagiri Transmission Dispute; Dismisses REC’s Challenge

Introduction

On 10.10.2025, the Hon’ble Supreme Court of India dismissed Civil Appeal Nos. 11011–11013 of 2025 filed by REC Power Development and Consultancy Limited (REC), thereby affirming the judgment dated 27.05.2025 passed by the Hon’ble Appellate Tribunal for Electricity (APTEL).

The appeals concerned long-standing disputes surrounding the Vemagiri Transmission Project, developed under the Tariff-Based Competitive Bidding (TBCB) framework in terms of the Guidelines dated 17.04.2006. Central to the matter were issues of restitution, regulatory jurisdiction, and the extent to which a Bid Process Coordinator (BPC) could be held accountable for actions taken during the execution of the TBCB process.

R Associates represented Power Grid Corporation of India Limited (POWERGRID), the successful bidder for the transmission project, whose acquisition costs and subsequent expenses were under challenge.

The Hon’ble Supreme Court, affirming APTEL’s reasoning, declined to interfere with the detailed factual and legal findings, recognising that principles of fairness and restitution governed the dispute.

Background

The Vemagiri Transmission Project was initiated to evacuate power from the gas-based generation projects of Spectrum and Samalkot under a TBCB framework.

In 2012, REC, acting as BPC, insisted that POWERGRID proceed with acquisition of the Special Purpose Vehicle—Vemagiri Transmission System Limited (VTSL), despite the Ministry of Power’s notifications dated 14.03.2012 and 19.03.2012 indicating non-availability of domestic gas for the concerned generators.

Spectrum and Samalkot themselves had, in letters dated 30.03.2012 and 06.04.2012, sought cancellation or deferment of the Transmission Service Agreement (TSA). REC nevertheless required POWERGRID to acquire VTSL and pay the acquisition price of Rs. 18.27 crores.

Given this sequence, POWERGRID later sought restitution before the Central Electricity Regulatory Commission (CERC), leading to a series of proceedings culminating in APTEL’s judgment directing adjustment of costs and holding REC accountable for failing to defer acquisition despite clear grounds to do so.

APTEL held that:

1. Spectrum and Samalkot were not liable for acquisition or operational costs;
2. POWERGRID could not be saddled with costs it incurred under compelling circumstances;
3. CERC must adjust these costs either by recovering the amount from REC or through other regulatory mechanisms.

REC challenged these findings before the Hon’ble Supreme Court.

Submission Made by the Parties

REC contended as under:

• CERC lacked jurisdiction over disputes involving BPC, as REC was only a pro forma party to the original proceedings.
• The acquisition was undertaken voluntarily by POWERGRID, despite indications regarding gas non-availability, and therefore no restitution could be claimed.
• APTEL erred in fastening liability upon REC when it was not a party to the TSA and had no role after initiating the bidding process.

POWERGRID’s key submissions were as under:

• REC, as BPC, failed in its statutory role:
  Under Clause 2.4(e) of the Request for Proposal (RfP), REC had the express power to defer acquisition on account of material developments. Despite receiving letters from Spectrum and Ministry notifications regarding non-availability of gas, REC insisted on strict adherence to timelines and mandated payment of acquisition price.
• POWERGRID acted without fault and under compelling circumstances:
  POWERGRID highlighted that non-compliance would have resulted in encashment of its bid bond under Clause 2.7 of the RfP. As the selected bidder, POWERGRID had no discretion other than to fulfil bid terms.
  
• Certain Concurrent findings of CERC and APTEL:
  Both authorities concurrently upheld that the acquisition price to be paid to POWERGRID is required to be reimbursed.
  
• CERC had jurisdiction over disputes involving a transmission licensee and BPC:
  Relying on Section 79(1)(c) and (f) of the Act, POWERGRID submitted that disputes “in connection with” inter-State transmission, including those arising during bidding, acquisition, and TSA implementation, fall squarely within the Central Commission’s jurisdiction. Reference was also made to the wide interpretation of regulatory powers recognised in K. Ramanathan v. State of Tamil Nadu and Energy Watchdog v. CERC.
• Restitution was the only equitable outcome:
  POWERGRID urged that the economic position preceding compelled acquisition must be restored, especially when the project could not proceed due to reasons clearly beyond its control.

Analysis and Conclusion

The Hon’ble Supreme Court, after hearing all parties, declined to interfere with APTEL’s detailed factual findings and legal reasoning, observing that “…no grounds are made out to interfere with the impugned judgment/order passed by the Appellate Tribunal for Electricity, New Delhi, on principles of fairness as well as restitution.”

The Hon’ble Supreme Court has thereby affirmed:

• the correctness of APTEL’s restitution-based approach;
• the concurrent findings of CERC and APTEL that the concurrently upheld that the acquisition price to be paid to POWERGRID is required to be reimbursed.
• the power of CERC to adjudicate disputes involving BPCs when connected to inter-State transmission; and
• the accountability of the Bid Process Coordinator when its actions materially contribute to avoidable economic loss.
• By dismissing REC’s appeals, the Hon’ble Supreme Court has brought finality to more than a decade of litigation stemming from the aborted Vemagiri Transmission System. The decision reinforces jurisprudence on BPC obligations, regulatory oversight under Section 79, and the availability of restitutionary remedies within the TBCB framework.

Prepared By:
Reeha Singh

Represented by:
Shubham Arya, Poorva Saigal, Reeha Singh and Shirin Gupta

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CERC Upholds Revocation of Connectivity for 300 MW Wind Project; Denies Relief to Inox Green in Bhuj-II Transmission Dispute

In an order dated 17.11.2025, the Central Electricity Regulatory Commission (CERC) has declined relief to Inox Green Energy Services Limited (IGESL) concerning its 300 MW connectivity at Bhuj-II Pooling Station, while upholding the regulatory framework governing connectivity and General Network Access (GNA).

The decision provides important clarity on compliance obligations under the GNA Regulations and the treatment of connectivity in cases of project delays.

1. Connectivity Linked to SECI-awarded Wind Projects

The matter pertains to IGESL’s 300 MW wind power project in Kutch, Gujarat, developed pursuant to six Power Purchase Agreements (PPAs) executed with Solar Energy Corporation of India (SECI).

While SECI granted multiple extensions of the Scheduled Commissioning Date (SCOD) up to 31.08.2022, the project remained uncommissioned beyond the extended timelines.

2. Regulatory Compliance Under GNA Framework

The Commission examined compliance requirements under the Connectivity and GNA Regulations, including:

• Achievement of Commercial Operation Date (COD)
• Demonstration of financial closure
• Adherence to prescribed timelines for connectivity utilisation

The record indicated that these milestones had not been fulfilled within the applicable regulatory timelines.

3. Connectivity and GNA: Regulatory Consequences of Non-Compliance

Pursuant to the applicable regulatory framework, steps were taken in relation to the connectivity granted to the Petitioner, including:

• Issuance of notices seeking compliance with regulatory requirements
• Invocation of applicable provisions under the GNA Regulations
• Action in respect of connectivity and associated bank guarantees

The Commission observed that such measures were taken in accordance with the governing regulations and applicable procedures.

4. Consideration of Project Delays

The Petitioner attributed delays to factors such as:

• Land allocation challenges in Gujarat
• Delay in readiness of evacuation infrastructure
• Pandemic-related disruptions
• Financing constraints

While these factors were noted, the Commission emphasised that connectivity under the regulatory framework remains contingent upon timely compliance with prescribed milestones.

5. No Automatic Right to Retain or Reallocate Connectivity

The Petitioner sought retention of connectivity under alternative routes and requested that the 300 MW capacity be reserved in its favour.

The Commission declined these prayers, holding that:

• Connectivity is conditional and not absolute in nature
• Continued non-utilisation of allocated capacity cannot be sustained indefinitely
• Allocation of transmission capacity must align with regulatory discipline and system efficiency

6. Delineation of Issues Beyond Scope

The Commission clarified that certain issues including

• Extension of SCOD
• Liquidated damages under PPAs

are being examined in separate proceedings and were not adjudicated in the present matter.

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Supreme Court rules in favour of the Powergrid Corporation of India Limited reinforcing regulatory role of the Central Commission Under Electricity Act, 2003

The Supreme Court today (May 15) ruled that the Central Electricity Regulatory Commission (CERC) is not precluded from exercising its functions under Section 79 of the Electricity Act, 2003  in the absence of regulations framed under Section 178 of the Electricity Act, 2003. 

The Judgment arises out of the SLPs filed by Powergrid Corporation of India Limited (PGCIL) against the Order dated 25.02.2021 passed by the High Court of Madhya Pradesh admitting the writ petitions filed by the Madhya Pradesh Power Transmission Company Limited (MPPTCL). 

MPPTCL had filed the Writ Petition before the High Court on the ground that the CERC had exercised powers  beyond its jurisdiction as per the regulations notified under Section 178 of the Electricity Act, 2003 while passing the orders dated 21.01.2020 and 27.01.2020 in Petition No. 311/TT/2018 and Petition No. 266/TT/2018 filed by PGCIL seeking transmission tariff for its assets.   

While setting aside the judgment dated 25.02.2021 passed by the High Court of Madhya Pradesh, the Supreme Court answered the following questions in favour of PGCIL:

i. Whether the CERC, while exercising its functions under Section 79(1) of   the Act, 2003, is circumscribed by statutory regulations enacted under   Section 178 of the Act, 2003?  

ii. Whether the CERC exercises regulatory or adjudicatory functions under   Section 79 of the Act, 2003? In other words, what is the scope of the CERC’s power to regulate inter-state transmission of electricity and determine tariff for the same under clauses (c) and (d) of Section 79(1)?

iii. Whether the grant of compensation by the CERC for the delay vide the orders dated 21.01.2020 and 27.01.2020 respectively, is a regulatory or adjudicatory function and to what extent are the principles of natural justice applicable to the exercise of such functions? 

iv. Whether the High Court was justified in admitting the writ petition filed by the respondent no. 1 herein challenging the order dated 21.01.2020 of the CERC when there existed an alternative remedy under Section 111 of   the Act, 2003?  

While dealing with the above questions, the Supreme Court has held as under:

a. CERC functions as both – decision-making and regulation-making authority under Section 79 and 178 of the Act, 2003 respectively.

b. While noting the Constitution Bench judgment in PTC India Limited v. Central Electricity Regulatory Commission (2010) 4 SCC 603, the Supreme Court has held that the Regulations under Section 178 has the effect of interfering with and overriding contractual relationships between the regulated entities, however, on the other hand the orders under Section 79 have to be confined to the existing statutory regulations and do not have the effect of altering the terms of contract between the specific parties before the CERC

c. In view of the law laid down by the Supreme Court in PTC and Energy Watchdog v. CERC reported in (2017) 14 SCC 80, it has been held that the absence of a regulation under Section 178 does not preclude the CERC from exercising its powers under Section 79(1) to make specific regulations or pass orders between the parties before it.

d. In the present case, the Supreme Court held that there is no contractual clause between the parties for establishing the risks of delay in commissioning of a transmission asset. There is also no uniform settled position as regards the liability of transmission charges payable before a particular transmission element is put in operation, in the form of regulations under Section 178. These circumstances, considered together with the prohibition on imposing liability of delayed payments on beneficiaries, leave a regulatory gap. The Supreme Court then proceeded to hold that in light of the dictum in the case of Energy Watchdog case, in the situation of an absence in Regulation, Guidelines or Contractual clauses, the Act, 2003 mandates that the CERC may strike a judicious balance keeping in mind commercial principles and consumers interest in exercise of its general regulatory powers under Section 79.

e. The Supreme Court further held that sources of power for enactment of a regulation under Section 178 and regulatory order under Section 79(1) are different. The   former emanates from the power of delegated legislation whereas the latter is an ad hoc power which is limited to the specific parties and situation in context of which the order is given. Since the regulatory powers under Section 79(1)  are of an ad hoc nature and are not of general application, the orders thereunder  are made appealable under Section 111.   

In light of the above findings, the Supreme Court held that CERC is empowered to order for imposition of transmission charges on the party to whom delay is attributable and there was no occasion for High Court to admit the Writ Petitions and CERC . The Supreme Court has concluded that APTEL is the appropriate authority to look into the merits of the matter should MPPTCL choose to prefer an appeal before APTEL under Section 111 of the Act, 2003.

The copy of the judgment has been directed to be circulated to all High Courts.  

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Supreme Court Upholds State Regulatory Oversight Over Inter-State Power Procurement Affecting Local Grid

The Supreme Court affirms that State Commissions can regulate inter-state electricity procurement affecting local grids. A landmark interpretation under the Electricity Act, 2003.

Tribunal Upholds Defaulter Pays Principle: Powergrid Wins TANTRANSCO Appeal

On 11.12.2024, the Appellate Tribunal for Electricity ruled in favor of Powergrid, upholding the Defaulter Pays Principle and TANTRANSCO’s liability for 50% transmission charges due to delays in the KPFBR Project. The judgment reaffirms that true-up proceedings cannot revisit settled tariff principles and underscores the Central Commission’s regulatory authority.

Appellate Tribunal of Electricity in the case of Punjab State Power Corporation Limited vs. Chadha Sugars & Industries Pvt. Ltd& Ors.